For any two goods, A and B, if MUA divided by PA equals 2.5 and MUB divided by PB equals 4.0, then with given income and prices the consumer should
A. buy more of good A and less of good B.
B. buy more of good B and less of good A.
C. stop because an equilibrium is achieved.
D. buy all of good B and no A.
Answer: B
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When the money market is drawn with the value of money on the vertical axis, the price level increases if
a. either money demand or money supply shifts right. b. either money demand or money supply shifts left. c. money demand shifts right or money supply shifts left. d. money demand shifts left or money supply shifts right.
According to Okun's law, when the output gap is positive, cyclical unemployment:
A. equals frictional unemployment. B. equals structural unemployment. C. equals zero. D. is negative.
In economics, a firm that makes a zero economic profit is said to be earning a normal profit.
Indicate whether the statement is true or false.
Process innovation causes an upward shift in a firm's total product curve and:
A. a decrease in its average product. B. a downward shift in its average total cost curve. C. an upward shift in its average total cost curve. D. an upward shift in its marginal revenue curve.