The consumer optimum for consuming two goods is achieved when
A. the marginal utility per last dollar spent is equal for the two goods.
B. the total utility from each good is equal.
C. the price multiplied by the marginal utility is equal for the two goods.
D. the price of each good is equal.
Answer: A
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As a group, U.S. consumers view hamburger as a normal good at low income levels and as an inferior good at high income levels. Based on this information, which of the following statements is NOT true?
A) As income for all consumers rises, the hamburger demand curves of low-income consumers shift rightward, and the demand curves of high-income consumers shift leftward. B) The aggregate demand curve for hamburger in the U.S. is upward sloping at low prices. C) The Engel curve for hamburger consumed in the U.S. is upward sloping at low income levels and downward sloping at high income levels. D) The income-consumption curve for hamburger and all other food products cannot be a straight line.
If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery, a profit-maximizing firm will
a. reduce the labor used and increase the machinery used if labor costs half as much as machinery. b. reduce the labor used and increase the machinery used if labor and machinery cost the same amount. c. reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery. d. reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery.
Which fact about the term structure is the expectations theory able to explain?
A. Why long-term bonds usually are less liquid than short-term bonds with the same defaultrisk. B. Why longer-term yields tend to be higher than shorter-term yields. C. Why interest rates on bonds with different terms to maturity tend to move together over time. D. Why yields on short-term bonds are more volatile than yields on long-term bonds.
Excess supply in an unregulated market will cause the price of a product to fall.
Answer the following statement true (T) or false (F)