Pam buys only thread and fabric, and she buys the quantities that maximize her utility. Her marginal utility from a spool of thread is 30 units and her marginal utility from a yard of fabric is 60 units
If the price of a spool of thread is $4, then you are sure that the price of a yard of fabric is ________. A) $4
B) $2
C) $8
D) $12
C
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The accelerator theory can explain the paradox that both interest rates and investment rise and fall in concert during the business cycle if
A) the effect of changes in Y effect on In dominate the effect of interest rates on investment. B) the LM curve is constant. C) the IS curve is constant. D) the effect of changes in interest rates on In dominate the effect of changes in Y on In.
In the one-period competitive model we have been studying
A) both consumption and total factor productivity are exogenous. B) consumption is exogenous and total factor productivity is endogenous. C) consumption is endogenous and total factor productivity is exogenous. D) both consumption and total factor productivity are endogenous.
Which of the following illustrates the economic inefficiencies of government regulation?
(a) Railroad rate increases are set by a government agency and these increases fall below increases in repair and depreciation costs but railroad passengers are satisfied. (b) Competitive railroad rates are determined by the buying and selling actions of those in the railroad industry. (c) Rate increases set by government agencies are set to match the increases in repair costs and the acceleration in depreciated capital. (d) Government protects private and individual rights to goods, service and resources.
Which of the following is the most accurate definition of a worker's "marginal revenue product"?
a. The change in the firm's profits as the result of hiring an additional worker. b. The change in the firm's total revenue as the result of hiring an additional worker. c. The change in the firm's output as the result of hiring an additional worker. d. The change in the firm's cost as the result of hiring an additional worker.