Classical economists assumed that
A. wages were flexible.
B. individuals did not suffer from money illusion.
C. prices were flexible.
D. all of these
Answer: D
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With this utility function, the bundle (3,2) provides the same utility as the bundle:
a. (2, 3). b. (2, 4). c. (2, 5). d. (3, 3).
A _____________ person would rather have a definite lower income than take a risk which entails the same expected value
Fill in the blank(s) with the appropriate word(s).
Successful foreign aid programs:
A. enhance a DVC's resources and therefore shift its production possibilities curve to the left. B. enhance a DVC's resources and therefore shift its production possibilities curve to the right. C. move the DVC from a high-investment-low-consumption position to a low-investment-high- consumption position on its stable production possibilities curve. D. cause a DVC's exchange rate to depreciate.
Given the marginal-utility-to-price ratio equalization principle, if MU1/P1 > MU2/P2,
a. the consumer should consume more of good 1 and less of good 2 b. the consumer should consume more of good 2 and less of good 1 c. total utility of good 1 is greater than total utility of good 2 d. total utility of good 2 is greater than total utility of good 1 e. the price of good 1 must fall