Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $2 and $4 respectively. The marginal utility of the last units of A and B are 16 and 24 respectively. These data suggest that Ms
Thomson:
A. has preferences that are at odds with the principle of diminishing marginal utility.
B. considers A and B to be complementary goods.
C. should buy less A and more B.
D. should buy less B and more A.
Answer: D
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One of the largest foreign portfolio investments in the U.S. comes from:
A. U.S. purchases of Chinese consumption goods. B. U.S. purchases of Chinese government debt. C. Chinese purchases of U.S. government debt. D. Chinese purchases of U.S. capital goods.
Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. Quick Burger Operates aDrive-Through WindowQuick Burger Does NotOperate Drive-Through WindowQuick Burger$24,000$15,000The Sunshine Café$11,000$23,000If Quick Burger has the legal right to operate a drive-through window, then the Sunshine Café would have to pay Quick Burger at least ________ per month to NOT operate a drive-through window.
A. $24,000 B. $11,000 C. $9,000 D. $15,000
According to Keynesian theory, the correct fiscal policy action to stimulate the economy would be to:
A. Raise taxes to increase aggregate demand. B. Increase the money supply to increase aggregate supply. C. Increase government expenditures to increase aggregate demand. D. Increase education spending to increase aggregate supply.
Increases in human capital will promote economic growth.
a. true b. false