Mr. Smith is consuming beer and wine. At his current level of consumption, the marginal utility per dollar is 30 units for beer and 20 units for wine. Mr. Smith should
A. consume twice as much wine as beer.
B. consume twice as much beer as wine.
C. increase his consumption of beer relative to wine.
D. increase his consumption of wine relative to beer.
Answer: C
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When the U.S. government launched a massive rescue plan in response to the 2008-2009 financial crisis, one of the main actions taken was to ________ because the desire was to lessen the severity of the recession by ________
A) increase the supply of loanable funds; limiting the decrease in investment B) decrease the supply of loanable funds; limiting the decrease in investment C) decrease the supply of loanable funds; encouraging decrease in investment D) increase the supply of loanable funds; encouraging decrease in investment E) increase the demand of loanable funds; encouraging decrease in investment
All of the following are factors that will shift the supply curve except
A) a change in production technology. B) changing tastes and preferences. C) a change in the price of substitutes in production. D) a change in the number of producers.
Refer to Figure 2-13. Which country has a comparative advantage in the production of coconuts?
A) Guatemala B) Costa Rica C) They have equal productive abilities. D) neither country
What is the "most efficient capacity" for the perfectly competitive firm?
A) The plant size at which LRAC is at its minimum. B) The plant size at which any of the SRATC curves are tangent to the LRAC curve. C) The plant size at which MR = MC. D) The plant size for which Price = AR.