Assume a consumer purchases a combination of goods X and Y such that MUx / ?Px = 20 units of utility per dollar and MUy / Py = 10 units of utility per dollar. To maximize utility, the consumers should buy:
a. neither X nor Y.
b. less of both X and Y.
c. more of both X and Y.
d. more of X and less of Y.
e. less of X and more of Y.
d
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Which of the following fiscal policy actions would be appropriate if the economy is experiencing an recessionary? gap?
A. a decrease in taxes B. an increase in interest rates C. a decrease in government spending D. a decrease in the money supply
Answer the following statement(s) true (T) or false (F)
1. Market demand for a private good is found by vertically summing individual demands. 2. The supply curve is positively sloped because marginal cost (MC) rises with output (Q). 3. If QS = –10 + ½ P, the slope of supply, when conventionally graphed, is +½ . 4. Equilibrium price is the price level at which QD equals QS. 5. If the price level is such that quantity supplied exceeds quantity demanded, there is excess demand, or a shortage in the market.
What is the common feature displayed by the following items?
a. eating in a newly opened "fusion" cuisine restaurant b. attending a Red Sox game in Fenway Park c. wearing Lucky Brand designer jeans A) They are all highly inelastic goods. B) The consumption of these goods takes place publicly. C) They tend to be consumed by better educated people. D) The consumption of these goods takes place privately.
Project C has an expected value of $500 and a standard deviation of 50. Project D has an expected value of $300 and a standard deviation of 10. Comment on the desirability of these projects
What will be an ideal response?