A consumer satisfies the condition MUx/Px = MUy/Py when his indifference curve ________ his budget constraint.
A. is completely below
B. is completely above
C. crosses
D. is just tangent to
Answer: D
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If the U.S. Congress passes legislation to raise taxes to control demand-pull inflation, then this would be an example of a(n)
A. supply-side fiscal policy. B. contractionary fiscal policy. C. expansionary fiscal policy. D. nondiscretionary fiscal policy.
If the marginal utility of each good consumers buy does not diminish but remains constant, we should witness consumers:
a. buying no goods at all. b. spending all of their income on the good with the highest MU. c. buying one of each good. d. buying only the least expensive goods. e. become indifferent to what goods they buy.
An example of a capital resource is: a. stock in a computer software company
b. a bond issued by a company selling electric generators. c. a dump truck. d. an employee of a moving company.
The difference between the number of workers employed if the economy was operating at full employment and the number of workers currently employed given aggregate expenditures is known as
a. cyclical unemployment b. frictional unemployment c. structural unemployment d. unemployment is not possible in the short run macro model e. urban unemployment