Suppose that for Jason the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per-serving popcorn is 10 . For his snack, Jason should buy
a. the caviar if he has the $50; otherwise the popcorn
b. the caviar if he has the $50; otherwise nothing
c. the popcorn, whether he has the $50 or not
d. one serving each of the caviar and popcorn, if he has $51
e. five servings of popcorn for each serving of caviar
C
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Consumers will spend a higher proportion of a one-time bonus than they would of a permanent salary increase
Indicate whether the statement is true or false
The theory that regulators' behavior will eventually be compromised by the special interests they regulate is known as the
A) capitulation hypothesis. B) creative hypothesis. C) captive hypothesis. D) capture hypothesis.
One result of asymmetric information in the market for bank loans is that
a. few loans are offered b. few bad loans are made c. more bad loans than good loans may be made d. lenders benefit at the expense of borrowers e. the interest on good loans will be higher than otherwise
Each of the following statements about the use of models in the study of economics is true EXCEPT:
A) models fit the observed facts exactly. B) models are sometimes revised in light of new research findings. C) models are easier to manipulate than the reality they represent. D) models contain the essential features of the economic behavior being studied.