Suppose that a consumer is currently at an optimum when consuming goods A and B. Which of the following must be TRUE?
A. The marginal utility to price ratio of A is equal to the marginal utility to price ratio of B.
B. The price of A is equal to the price of B.
C. The marginal utility of A is equal to the marginal utility of B.
D. The total utility from A is equal to the total utility from B.
Answer: A
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The 2007-2009 recession began with reductions in investment and consumption spending, precipitated by a financial crisis. This explanation for the recession is consistent with
A. the monetarist view of macroeconomic instability. B. the mainstream view of macroeconomic instability. C. the rational expectations view of macroeconomic instability. D. the real business cycle theory of macroeconomic instability.
If real salaries decrease but nominal salaries do not, this means that
A) prices have risen. B) prices have fallen. C) prices have not changed. D) the purchasing power of money has increased.
Ron's Hamburger Joint is the only restaurant in town. The above figure represents Ron's cost, the market demand, and marginal revenue curves. Ron operates as a single-price monopoly
a. How many hamburgers does Ron produce? b. What price does Ron charge for a hamburger? c. What is Ron's total revenue? d. What is his total cost? e. What is Ron's economic profit?
The condition, MRS1,'C' = w ', describes the representative consumer's
A) investment decision. B) consumption - savings decision. C) current period work - leisure decision. D) future period work - leisure decision.