The price of hamburgers is $2 and the price of brownies is $4. The consumer has $16 of income. The consumer is purchasing 3 hamburgers and receiving 20 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 the marginal utility per dollar spent is the same for the last unit of each good.
B. is not an optimum because the consumer has not spent all of his money.
C. is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for brownies.
D. is an optimum since the entire income is spent and total utility is maximized.
Answer: B
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Jamie is preparing to take his SAT tests. The table above shows how Jamie's score depends on the number of hours a week Jamie studies
a. Plot the relationship in the figure, putting the hours studied on the horizontal axis. b. Is the relationship you plotted positive or negative? c. What happens to the slope of the relationship as hours studied increase? d. Suppose Jamie can enroll in an SAT prep course and, by so doing, for every possible number of hours he studies, his score will be 100 points higher. Plot the new relationship between the number of hours studied and Jamie's SAT score in the figure. e. How many variables are involved in the figure you just completed?
Which of the following will shift the consumption function upward?
a. An increase in consumer wealth. b. An increase in the interest rate. c. An increase in personal income taxes. d. A decrease in the MPC. e. An increase in disposable income.
Which of the following guarantees the deposits in almost all banks up to a $250,000 limit per account?
a. the Federal Reserve b. the FDIC c. the U.S. Treasury d. Bank of America Corporation
Which of the following equations represents GDP for an open economy?
a. Y = C + I + G + NX b. NX = I - G c. I = Y - C + G + NX d. Y = C + I + G