Suppose Fernando allocates his lunch money to pizza and Coke. A Coke costs $1 and a slice of pizza costs $1.50 . The marginal utility of the last slice of pizza Fernando ate was 30, and the marginal utility of his last Coke was 25 . Fernando spent all of his lunch money. From this information, we can conclude that
a. Fernando allocated his money in a way that maximized his total utility
b. Fernando's total utility would have been higher if he had purchased more Coke and less pizza
c. Fernando's total utility would have been higher if he had purchased more pizza and less Coke
d. Fernando could have increased his total utility by purchasing more Coke but the same quantity of pizza
e. Fernando could have increased his total utility by purchasing more pizza but the same quantity of Coke
B
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After the financial crisis in the 1990s many economists criticized the IMF and the World Bank. Some suggestions for reform are to
A) eliminate both the institutions. B) increase private-sector lending by governments providing tax breaks to lenders. C) create a board of directors made up of finance ministers for the IMF. D) all of the above
When the United States imposes a tariff on a good, the amount of the ________ in U.S. consumer surplus is ________ the amount of the ________ in U.S. producer surplus
A) increase; smaller than; increase B) decrease; larger than; decrease C) decrease; larger than; increase D) decrease; equal to; increase
From the new classical perspective, the disinflation in the early 1980s resulted in a significant recession because
a. the policy change to disinflation was unanticipated. b. the policy was not credible. c. inflationary expectations were backward looking. d. None of the above e. both a and b.
Consider a bond that costs $1000 today and promises a one-time future payment of $1,080 in four years. What is the approximate interest rate on this bond?
A. 8% B. 2% C. 10.8% D. 4%