Which of the following statements about utility and preferences is false?
A) If Sidra prefers tea to coffee and coffee to hot chocolate, then she must prefer tea to hot chocolate.
B) If two individuals, Ingrid and Inez, each consume the same bundle of goods, then both Inez and Ingrid must receive the same utility from the bundle.
C) Utility cannot be compared across consumers.
D) Preferences can be ranked.
B
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What is the real value of money?
A) the ability of shop at market prices B) the quantity of goods it can buy C) its compounded earnings in banks D) its face value
Refer to Figure 10.4. Suppose the economy's equilibrium starts out with an output gap of 1, and real GDP increases so the output gap increases to 2
If the Fed keeps the money supply constant, money demand will ________ and the nominal interest rate will ________. A) increase; increase B) increase; decrease C) increase; remain constant D) remain constant; remain constant
Which of the following is always a characteristic of the contraction phase of the business cycle?
A) lower unemployment rates B) a decline in Real GDP C) higher inflation rates D) a decline in GDP E) all of the above
If insurance companies knew how risk-averse their customers were:
A. diversification would not occur. B. risk pooling would not occur. C. policies would be perfectly diversified, resulting in lower premiums for everyone. D. adverse selection would not occur.