If the utility for two goods "x" and "y" is measured as U = x + y, then it can be concluded that
A) "x" and "y" are perfect substitutes.
B) "x" and "y" are perfect complements.
C) "x" and "y" are both bads.
D) the indifference curves on the x,y graph will be upward sloping.
A
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Gerald spends his weekly income on gin and cocktail olives. The price of gin has risen from $7 to $9 per bottle, the price of cocktail olives has fallen from $6 to $5 per jar, and Gerald's income has stayed fixed at $46 per week. Since the price changes, Gerald has been buying 4 bottles of gin and 2 jars of cocktail olives per week. At the original prices, 4 bottles of gin and 2 jars of cocktail
olives would have a. exactly exhausted his income. b. cost more than his income. c. cost less than his income. d. could have maximized his satisfaction given his budget constraint.
Small areas within which especially favorable investment and trading conditions are created by governments in order to attract export-oriented industries.
a. export-processing zones b. maquiladoras c. back offices d. export oriented ancillary services export zones
To produce 150 units of output, a firm must use 3 employee-hours. To produce 300 units of output, the firm must use 8 employee-hours. Apparently, the firm is:
A. not using any fixed factors of production. B. producing in the long run. C. experiencing negative returns. D. experiencing diminishing returns.
Saving is always equal to:
A. planned investment less unintended increases in inventories. B. actual investment. C. planned investment. D. unintended changes in inventories.