Assume that Virgil purchases a combination of products Y and Z such that, after he is done spending his entire budget, MUy / Py = 25 and MUz / Pz = 25. Based on the equal marginal principle, Virgil
A. should have purchased more Y and more Z.
B. should have purchased less Y and more Z.
C. is maximizing his total utility.
D. should have purchased more Y and less Z.
Answer: C
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Which of the following identifies correct reasons for the sustained growth in the Western world post 19th century?
A) Demographic transition and the American civil war B) The American civil war and the Industrial Revolution C) The Agricultural Revolution and the Industrial Revolution D) Demographic transition and the Industrial Revolution
An unexpected rise in GDP growth should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
If the real wage needs to decrease to restore equilibrium in a labor market, this can happen by
A) keeping the nominal wage constant and allowing deflation to allow the real wage to decline. B) keeping the nominal wage constant and allowing inflation to allow the real wage to decline. C) raising the nominal wage and allowing deflation to allow the real wage to decline. D) raising the nominal wage so long as there is no inflation occurring in the economy.
Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."
What will be an ideal response?