The price of hamburgers is $2 and the price of brownies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 30 utils for the last hamburger. He is also purchasing 2 brownies and receiving 40 utils for the last brownie. This set of goods
A. is an optimum since the entire income is spent and total utility is maximized.
B. is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for brownies.
C. is not an optimum because the consumer has not spent all of his money.
D. is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.
Answer: B
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Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms Cleaned Per HourMeals Cooked Per HourLou54Alex33Which of the following is true?
A. Alex has both an absolute advantage and a comparative advantage over Lou in both tasks. B. Alex has a comparative advantage over Lou in cleaning. C. Lou has both an absolute advantage and a comparative advantage over Alex in both tasks. D. Lou has a comparative advantage over Alex in cleaning.
During the late 1990s, Japan experienced reductions in the GDP deflator. Given this information, we know with certainty that
A) real GDP fell during these periods. B) real GDP did not change during these periods. C) the overall price level in Japan decreased during these periods. D) both real GDP and the overall price level decreased during these periods.
Total revenue will increase if price
A. rises and demand is elastic. B. rises and demand is unit elastic. C. falls and demand is inelastic. D. falls and demand is elastic.
In the figure above, an increase in the monetary base would create a change such as a
A) movement from point a to point b along the supply of money curve MS0. B) movement from point b to point a along the supply of money curve MS0. C) shift from the supply of money curve MS0 to the supply of money curve MS1. D) shift from the supply of money curve MS1 to the supply of money curve MS0.