You have one free movie to give away. Susie Wong would receive 75 units of utility from the pass while Ralph Zilda would get 90 units of utility from the pass. Movie tickets sell for $8 at the theater. You want to create the most satisfaction possible by giving away the pass. Who should the movie be given to?
a. Susie because her current utility is lower.
b. Ralph because he will receive the most total utility.
c. Ralph because his marginal utility per dollar is higher.
d. Not Susie because her marginal utility is lower.
e. There is not enough information to decide.
E
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In the model of the money supply process, the bank's role in influencing the money supply process is represented by
A) the excess reserve. B) both the excess reserve and the market interest rate. C) the currency ratio. D) only borrowed reserves.
A major fruit juice manufacturer failed in its attempt to engage in price discrimination between students and all other consumers. What is a possible explanation for this failure?
a. There was nothing to prevent the students from reselling the fruit juice to other consumers. b. The fruit juice manufacturer produced in a perfectly competitive market. c. The two groups of consumers probably have the same demand elasticity for fruit juice. d. The cost of producing the product is relatively high. e. Demand for fruit juice is probably inelastic.
If the MPC in an economy is 0.9, the government could shift the aggregate demand curve rightward by $40 billion by
A. increasing government purchases by $4 billion. B. decreasing taxes by $4 billion. C. increasing taxes by $4 billion. D. increasing government purchases by $40 billion.
An antigrowth view states that there may be a significant trade-off between productivity and:
A. economies of scale. B. employment. C. education. D. the quality of life.