If A is preferred to B and C is preferred to D, then B must be preferred to C to satisfy transitivity
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion. If Congress and the president increase government purchases by $500 billion, then the economy will be brought to equilibrium at potential real GDP
Indicate whether the statement is true or false
_____ prefer an import tax to a quota
a. Taxpayers b. Domestic producers c. Foreign producers d. Consumers
Helen is a computer analyst earning $750,000 a year in New York and flies each winter weekend to Florida to bask in the sun. The price tag is $1,500 . Her cousin Fred is a nursery school teacher earning $35,000 a year in Chicago and spends his winter weekends going to avant-garde movie theaters. The price tag is $20 . Who gets the better deal? a. Helen gets the better deal because the marginal
utility of the Florida weekend is higher than the weekend of movies, regardless of the price tags. b. Helen gets the better deal because the ratio of marginal utility to price is higher than the ratio of marginal utility to price for a weekend of movies. c. Fred gets the better deal because the ratio of marginal utility to price is higher than the ratio of marginal utility to price for a Florida weekend. d. Using interpersonal comparisons of utility, it is clear that Fred gets the better deal because the difference in price overwhelms any difference in the marginal utility of aweekend of movies compared to a weekend in Florida. e. It is impossible to say who gets the better deal because we can't engage in interpersonal comparisons of utility.
The opportunity cost of holding money
a. the dollar cost necessary to change other assets into money
b. the time cost of accessing funds
c. the value of the goods and services a person is able to obtain with the money
d. the interest a person could have earned by holding other forms of wealth instead
e. zero, because opportunity costs only apply to real assets, goods and services