Phyllis spends her income on beer and pretzels, and a six pack of beer costs the same as a bag of pretzels. If she is in consumer equilibrium, we know:
a. she buys the same quantities of six packs of beer and bags of pretzels
b. she gets the same marginal utility from the last six pack of beer as from the last bag of pretzels.
c. she gets the same total utility from beer as she does from pretzels.
d. that all of the above are true.
b
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Suppose the required reserve ratio is 5%. If banks are conservative and choose not to loan all of their excess reserves, the actual money multiplier is
A) less than 20. B) greater than 20. C) equal to 20 D) equal to 5.
The purpose of the ceteris paribus assumption used in economic analysis is to:
A. Avoid making normative statements B. Distinguish macroeconomics from microeconomics C. Make sure that all relevant factors are considered D. Focus on the effect of a single factor on a certain variable
Which of the following industries most closely approximates pure competition?
A. Agriculture. B. Farm implements. C. Clothing. D. Steel.
Refer to the above figure. Profits will be positive
A. when the price equals $1. B. at prices between $1 and $2. C. when the price is above $2. D. when the price equals $2.