Which of the following statements is true?
A) Rational economic agents maximize more than just monetary income.
B) It is not necessary to consider the risks of a particular alternative while making an optimal decision.
C) An individual does not require information to make optimal decisions.
D) The principle of optimization is only accurate when it comes to making monetary decisions.
A
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Oscar makes purchases of an existing product (X) such that the marginal utility of the last unit he consumes is 10 utils and the price is $5. He also tries a new product (Y) and the marginal utility of the last unit he consumes is 8 utils and the price is $1. The equal marginal principle suggests that Oscar should
A. increase his consumption of product Y and decrease his consumption of product X. B. increase his consumption of product X and increase his consumption of product Y. C. decrease his consumption of product Y and decrease his consumption of product X. D. increase his consumption of product X and decrease his consumption of product Y.
A monopolistically competitive firm that earns economic profits in the short run will face a more elastic demand curve in the long run
Indicate whether the statement is true or false
International capital flows in an open economy have the effect of
a. reducing the power of monetary policy. b. increasing the power of monetary policy. c. increasing the power of monetary policy in an expansion and reducing it in a contraction. d. reducing the power of monetary policy in an expansion and increasing it in a contraction.
All other things constant, when a small LED bulb manufacturing unit recruits a new worker, its weekly output increases from 40,000 bulbs to 44,000 bulbs. If the market price of each LED bulb is $1.50, the marginal revenue product of the new worker is: a. zero
b. $1,500. c. $6,000. d. $4,000.