Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.Table 19.3Michael's Utility ScheduleUnits of ColaTU of ColaMU of ColaUnits of PretzelsTU of PretzelsMU of Pretzels14040130302 322 2039624366164112 478 5124 584 In Table 19.3 the marginal utility per dollar of the second cola is
A. 4.
B. 12.
C. 6.
D. 10.
Answer: A
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During the 2008 Presidential campaign, candidate Barack Obama proposed
A. re-imposing the 6.2% (old-age) Social Security tax on incomes over $250,000 per year. B. raising the "income cap" for Social Security taxes from $106,800 to $250,000. C. eliminating entirely the Social Security taxes paid by employers. D. reducing by one-half the Social Security tax rates on employers.
The short-run Phillips curve will not shift unless there is
A) an increase in inflation that is unanticipated. B) a decrease in inflation that is unanticipated. C) a change in inflation expectations. D) an increase in the unemployment rate.
People with hidden health problems are more likely to buy health insurance than are other people. This is an example of
a. moral hazard and makes the cost of health insurance higher than otherwise. b. moral hazard and makes the cost of health insurance lower than otherwise. c. adverse selection and makes the cost of health insurance higher than otherwise. d. adverse selection and makes the cost of health insurance lower than otherwise.
Fed purchases of bonds from the public, called open market operations:
A. tend to increase reserves in the system leading to reductions in interest rates. B. tend to reduce the money supply because the bonds are expensive to purchase. C. tend to reduce reserves in the banking system because all the Fed gets is more bonds. D. tend to increase bond prices but generally have no effect on bank reserves.