The decision-making process followed by consumers to maximize utility assumes that
A. consumers have unlimited incomes.
B. consumers behave rationally, attempting to maximize their satisfaction.
C. consumers are unable to rank their preferences.
D. consumers do not know how much marginal utility they obtain from consuming additional units of various products.
Answer: B
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When actual real GDP is above natural real GDP, we say that
A) the output gap is positive. B) the output gap is negative. C) the output gap has been eliminated. D) the output gap cannot be calculated.
Suppose a nation's rate of growth of per capita real Gross Domestic Product (GDP) is 1 percent and its rate of growth in real GDP is 3 percent. Given this information, the nation's population growth rate is approximately equal to
A. 3 percent. B. -2 percent. C. 2 percent. D. None of these: Cannot be determined with the information.
The theory of PPP suggests that if one country's price level falls relative to another's, its currency should
A) depreciate. B) appreciate. C) float. D) do none of the above.
Refer to the information provided in Figure 6.13 below to answer the question(s) that follow.
Figure 6.13Refer to Figure 6.13. Assume Megan has two products available, pizza and hamburgers. Megan must be compensated with more hamburgers as she gives up more pizzas. The curve in Panel ________ represents her indifference curve.
A. A B. B C. C D. D