How would the prices of sodas and cookies decreasing affect utility maximization?
A. Your budget line would not change but your indifference curve would get steeper to consume more of both goods.
B. Your indifference curve would shift outward (to the right) and you could consume more.
C. Your budget line would shift outward (to the right) and you could consume at a higher indifference curve.
D. Your indifference curves would shift inward (to the left) and you would consume less of each good but have more extra money.
Answer: C
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Which of the following is NOT a macroeconomic question?
A) How does a fiscal stimulus package affect gross domestic product? B) Should Congress enact tougher immigration laws to reduce unemployment? C) Should we have a constitutional amendment requiring the federal government to balance the budget each year? D) Should restaurants be required to list the number of calories for each product on their menus?
Explain the relationship between real GDP and aggregate planned expenditure, AE. What change to inventories takes place when the two are not equal?
What will be an ideal response?
Assume there is a simultaneous increase in home foreclosures and a decrease in consumer incomes. Based on this information we can conclude, with certainty, that in the market for used single-family homes equilibrium:
A) price will increase. B) price will decrease. C) quantity will increase. D) quantity will decrease.
Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 6 hours per day. If he is following the marginal principle, what must his marginal cost per hour be?
A. $16 B. $24 C. $32 D. $48