Suppose a consumer spends her income on two goods: iTunes music downloads and books. The consumer has $100 to allocate to these two goods, the price of a downloaded song is $1, and the price of a book is $20 . What is the maximum number of books the consumer can purchase?
a. 100
b. 20
c. 10
d. 5
d
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Which of the following statements is correct with respect to the debate between the Keynesians and new classical economists?
a. Each side criticized monetarism b. The key source of disagreement centered on how people form their expectations. c. Both models believed that recessions were characterized by falling aggregate demand. d. Both believed that unanticipated changes in monetary policy could influence output. e. all of the above.
An inframarginal positive externality _____
a. requires subsidization to reach an optimal level of output b. requires regulation to reach an optimal level of output c. requires corrective taxation to reach an optimal level of output d. requires no action because the optimal level of output has been reached
Which of the following is an example of an entrepreneur?
a. Steve Jobs and Steve Wozniak starting Apple b. Jeff Bezos starting Amazon c. The launch of the social media giant – Facebook d. All of the above are examples of successful entrepreneurial endeavors.
Which of the following concepts is most helpful in explaining why investment increases when the interest rate falls?
a. deadweight loss b. present value c. economic growth d. financial intermediation