Suppose you have a limited money income and you are purchasing products A and B, whose prices happen to be the same. To maximize your utility, you should purchase A and B in such amounts that:
A. their marginal utilities are the same.
B. their total utilities are the same.
C. their marginal and total utilities are proportionate.
D. the income and substitution effects associated with each are equal.
Answer: A
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If a job requires two activities and there are two workers who can perform those activities, then which of the following statements regarding absolute advantage must be false?
a. One worker can have an absolute advantage in both activities. b. One worker may not have an absolute advantage in neither activity. c. Neither worker can have an absolute advantage in either activity. d. Both workers can have an absolute advantage in both activities.
The optimal level of military expenditures is the level at which _____
a. a country is completely protected from foreign invasion b. a country spends more on national defense than all other countries along it to win an arms race c. a country spends more on national than its rivals d. the marginal benefit of additional expenditures equals marginal cost
Suppliers will provide more of a good when
A) the market price increases. B) the good is a normal good. C) resource prices increase. D) there is a decrease in demand.
What effect does an expansionary monetary policy in the U.S. have on the foreign trade sector?
A) The lower value of the dollar will decrease exports and increase imports. B) The lower value of the dollar will decrease imports and increase exports. C) The higher value of the dollar will decrease exports and increase imports. D) The higher value of the dollar will decrease imports and increase exports.