Rational individuals prefer to consume goods during the current year rather than in the future because of:
a. positive time preference.
b. positive consumption preference.
c. high expected rate of inflation.
d. high market rate of interest.
A
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In February 2010, the price of gasoline in the Florida was $2.629 per gallon and the CPI was 202.4 with a base period of 1982 to 1984. What was the real price of gasoline per gallon in base period dollars?
A) $2.629 per gallon B) $1.00 per gallon C) $1.29 per gallon D) $5.32 per gallon E) $1.809 per gallon
A decrease in autonomous consumption ________
A) lowers planned expenditures B) raises equilibrium output for any level of the interest rate C) causes a movement down along the IS curve D) all of the above E) none of the above
Joe and Rita each have some milk and cookies (Milk on the horizontal axis). Joe's MRS of cookies for milk is 2. Rita's MRS of cookies for milk is 4. Which of the following statements is TRUE?
A) No gains from trade are possible. B) Both Rita and Joe can be made better off if Rita gives Joe some cookies in exchange for milk. C) Rita and Joe are on the contract curve. D) Both Rita and Joe can be made better off if Joe gives Rita some cookies in exchange for milk.
If the apartment owner decides to fine both the roommates if the apartment is dirty, such that now if neither of them clean they each get a 5 utility loss, what would the new equilibrium be now?
a. John cleans, Joe doesn't b. Joe cleans, John doesn't c. Neither of them clean the apartment d. Both A&B