The MU/P equalization principle means consumers will spend their income (budget) so that the MU/P ratio of the goods consumed is
a. zero for each good
b. higher for goods the consumer wants the most (highest marginal utility)
c. maximized for the goods the consumer wants the most (highest marginal utility)
d. higher than TU/P
e. the same for each good
E
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Kristie currently spends her $1,000 a week income as follows: $500 on X, $300 on Y, and $200 on Z. Her mother then gives her a $100 bill and tells her to use it to buy more Z. Kristie actually takes the $100 her mother gave to her, adds $40 to the $200 she usually spends on Z, and buys $240 worth of Z. Did Kristie's mother's $100 go to buy only Z?
A) Yes, because Kristie used her mother's actual $100 bill to buy Z. B) No, because if it had, Kristie would have bought $300 worth of Z. Some of Kristie's mother's money went for what Kristie had next on her list of desired purchases. C) Yes, since Kristie bought $240 worth of Z, and the amount of money her mother gave her is less than $240. D) There is not enough information to answer the question.
Based on the table showing a summary of fiscal tools, if the government increases taxes, it is most likely trying to ______.
a. fight inflation
b. utilize expansionary policy
c. boost aggregate demand
d. fight unemployment
The outcome of the Civil War in the United States was that:
a. the Confederates were allowed to keep their currency. b. the value of the Confederate dollar increased at the end of the war. c. the Confederate dollar became worthless. d. the North's currency declined in value.
The interest rate at which the present value of costs equals the present value benefits is the
A. coupon interest rate. B. internal rate of return. C. yield to maturity. D. market interest rate.