How does the introduction of cognition into a consumer's choice between consumption now and saving affect marginal utility per dollar, the amount spent on consumption now, and the amount saved? Assume utility is maximized.
What will be an ideal response?
The marginal utility per dollar will increase for both consumption and saving. The amount spent on consumption now will decrease and the amount saved will increase.
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According to the graph shown, if this economy were to open to trade, which amount of surplus would be transferred?
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. Area FG would be transferred to the consumer.
B. Area DE would be transferred to the consumer.
C. Area DEFG would be transferred to the consumer.
D. Area FG would be transferred to the producer.
Refer to the diagram and assume that price decreases from $10 to $2. The coefficient of the price elasticity of supply (midpoint formula) relating to this price change is about:
A. 4 and supply is elastic.
B. 1 and supply is unit elastic.
C. .5 and supply is inelastic.
D. .25 and supply is inelastic.
The slope of a line equals the
A) change in the variable measured along the x-axis divided by the change in the variable measured along the y-axis. B) change in the variable measured along the y-axis divided by the change in the variable measured along the x-axis. C) change in the variable measured along the x-axis minus the change in the variable measured along the y-axis. D) change in the variable measured along the x-axis multiplied by the change in the variable measured along the y-axis.
Assume that a security has two possible outcomes. There is a 50 percent chance that the yield will equal 12 percent and a 50 percent chance that the yield will equal 4 percent. The expected yield for this security is
A) 16 percent. B) 12 percent. C) 8 percent. D) 4 percent.