The substantial increase in household debt relative to income since the mid 1980s meant that in 2008 many households
a. had little savings or other reserve assets for use to deal with unexpected expenditures.
b. could safely afford to purchase larger homes because housing is always a good investment.
c. could spend everything they earned because their interest obligations on outstanding credit were low.
d. would be able to easily adjust their current spending if their monthly payments on adjustable rate mortgages rose.
A
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Shaniq buys only soda and pizza and is buying the amounts that maximize her utility. The marginal utility from a soda is 30 and the price of a soda is $2. The marginal utility from a slice of pizza is also 30. The price of a slice of pizza must be
A) $30. B) $2. C) $1. D) some amount that cannot be calculated without more information.
Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?
a. This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. b. This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. c. This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. d. This would never happen. Policymakers always follow the advice of economists.
If U.S. net exports are negative, then net capital outflow is
a. positive, so foreign assets bought by Americans are greater than American assets bought by foreigners. b. positive, so American assets bought by foreigners are greater than foreign assets bought by Americans. c. negative, so foreign assets bought by Americans are greater than American assets bought by foreigners. d. negative, so American assets bought by foreigners are greater than foreign assets bought by Americans.
Which of the following is a characteristic of a monopolistically competitive market?I.Firms sell differentiated products.II.Each firm is earning a zero economic profit in the long run.III.Potential entrants face artificial barriers to entry.
A. I only B. I and II only C. II and III only D. I, II, and III