A consumer possesses five pounds of bananas and values their total utility at $2.14. If one additional pound is acquired and marginal utility is 11 cents, total utility will
A. rise to $2.25.
B. fall to $2.03.
C. stay the same.
D. fall to $2.11.
Answer: A
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Creating money is the same as creating wealth
a. True b. False
Which of the following examples does not illustrate the principle represented by the adage, "There is no such thing as a free lunch"?
a. Melissa needs to pay her rent and her electric bill. b. Kevin must choose between buying a new flat screen television and buying his textbooks for this semester. c. Robert must decide between studying for his psychology exam and working at his part-time job. d. Lisa can spend her money on a new smart phone or on a weekend trip.
Wages of doctors tend to be higher than wages of bankers. Which of the following is a compensating differential explaining the difference in wages?
a. Doctors have the stress of being responsible for other peoples' lives while bankers do not. b. Doctors are on call to work nights and weekends, while bankers work traditional business hours. c. Doctors must pay for malpractice insurance in case they are sued for a mistake on the job. d. All of the above are compensating differentials.
In its function of controlling the money supply, the Fed does not do which one of the following?
A. Controls the money supply. B. Clears checks. C. Regulates banks. D. Offer checking accounts to the public.