Why are diamonds more expensive than water?
A. because the last diamond has higher marginal utility than the last glass of water
B. because the last glass of water has higher marginal utility than the last diamond
C. because water is a necessity
D. because you get more total utility from diamonds
Answer: A
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If the consumption function is C = 25 + 0.9y and income increases by $100, then consumer spending will increase by
A) $10. B) $25. C) $90. D) $115.
If the FOMC decides that the Fed should buy bonds it
A) instructs the New York Federal Reserve Bank's trading desk to buy them. B) asks the Congress for permission to buy them. C) requires the permission of the Financial Oversight Committee. D) requires the President's signature on the buy order.
Refer to Scenario 11.1. Suppose Mariana purchases the needed land from Abe, Ben, Cat, and Don for the value she calculated the land to be worth, but Eva refuses to sell the land for the same price as the other 4 ranchers
What is the maximum amount Mariana would be willing to pay Eva for her land and still be willing to build the railway? A) $400,000 B) $1 million C) $1.4 million D) $3 million
Say the bus authority in your city increased the typical bus fare from $1.00 to $1.50 and that due to this increase total revenue increased by 20%. Based on this we know that the price elasticity of bus rides in your neighborhood is (assume demand curve is linear):
A. 0.4. B. 0.8. C. 1.5. D. 1.