Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2 . Then the MRS (of soft drinks for hot dogs)—that is, the number of hot dogs the individual is willing to give up to get one more soft drink—is:
a. 5.
b. 2.
c. 1/2.
d. 1/5.
d
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The downward slope of the aggregate demand curve shows that
A) a higher price level will cause planned purchase rates for final goods and services to be higher. B) an increase in aggregate demand reduces the long-run aggregate supply. C) a lower price level will cause planned purchase rates for final goods and services to be higher. D) an increase in aggregate demand increases the long-run aggregate supply.
Monetarists are in favor of
a. inflation targeting. b. interest rate targeting. c. output targeting. d. nominal income targeting. e. money growth targeting.
In 2002, government expenditures as a percentage of GDP were lowest for which country?
a. Sweden b. United States c. Germany d. France
Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is
A) a downward-sloping bowed-out curve. B) a downward-sloping straight line. C) an upward-sloping straight line. D) It is impossible to answer this question without knowing which good would be plotted on the vertical axis.