The price of a bagel with cream cheese equals $2 and the price of a donut equals 50 cents. The marginal utility to Jade of the last bagel consumed equals 16 utils. If Jade maximizes her satisfaction by consuming both bagels and donuts, we would expect the marginal utility of the last donut consumed to equal:
a. 20 utils.
b. 12 utils.
c. 8 utils
d. 4 utils.
d
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If the income elasticity of demand for spaghetti is -1.3, then spaghetti
A) is a normal good. B) is an inferior good. C) has an elastic demand. D) is income elastic.
Refer to Figure 15-9. In the figure above suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?
A) an increase in the required reserve ratio B) a decrease in income taxes C) an open market sale of Treasury bills D) an open market purchase of Treasury bills
If a large open economy, like the United States, reduces its budget deficit, what impact would this have on a small open economy?
A) higher savings B) increased investment C) increased net savings D) no change in interest rates
According to classical economists,
a. prices are rigid b. both V and Q are variable c. changes in M cause changes in V d. the equation of exchange becomes a theory in which the quantity of money explains liquidity e. the velocity of money is constant