Sarah has the utility function U(X,Y) = X.5Y.25. When Sarah consumes X = 2 and Y = 6 she has a marginal rate of substitution of
A) -12.
B) -1/6.
C) -6.
D) -1/12.
C
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As a firm in monopolistic competition sets the price for its product, the firm faces a tradeoff between
A) supply and demand. B) efficiency and equity. C) internal and external economies of scale. D) price and the quantity it can sell. E) its marginal revenue and its price.
Suppose the economy is just recovering from a recession and all signs now point to robust growth. How might this transition from recovery to expansion be reflected in the monetary policy curve?
What will be an ideal response?
Fifteen years ago your parents purchased some land with the idea of selling it later to help pay your college expenses. They purchased the land for $100,000 . They sold if for $180,000 . During the time they held it the price level rose from 80 to 120 . If your parents face a 25% tax rate, what was their real after-tax gain? (Hint: What's the real value of the land in current prices?)
Producers will take external costs into account when:
A. they actually have to pay those costs. B. environmental groups apply sufficient pressure and generate negative press coverage. C. those costs are less than the benefits. D. those costs are less than the private costs.