When total utility is at its maximum what must be the value of marginal utility?
What will be an ideal response?
Total utility is maximized when marginal utility is zero.
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What is rent seeking? How does rent seeking affect the deadweight loss from monopoly?
What will be an ideal response?
Workers and firms are currently expecting the price level to increase from 110 to 114. The Federal Reserve then announces that it will be reducing the growth rate of the money supply
If the Fed's announcement is credible, and firms and workers have rational expectations, describe how the expectations of firms and workers will be affected and how the change in expectations will affect the unemployment rate.
When the economy is experiencing a negative output gap:
A. some people and some capital are unemployed. B. the economy may be in a recession. C. there is little inflationary pressure due to low demand. D. All of these statements are true.
If you want to deflate the current price of something to eliminate the effect of inflation,
a. divide the number by the price index. b. multiply the number by the price index. c. multiply the number by 2 and then divide by the price index. d. multiply the number by the price index and then divide by 2.