A consumer is in equilibrium when:
a. his or her marginal utility derived from each good is maximized.
b. each dollar spent on each item provides more and more satisfaction.
c. each dollar spent on each item provides less and less satisfaction.
d. the last dollar spent on each item provides the same additional satisfaction as that dollar would if spent on any other item.
e. his or her average utility for each item is the same.
d
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Suppose that in the United States and the United Kingdom the real rate of interest is 1 percent and constant. In this case, the nominal interest rates in both countries
A) are equal. B) differ solely by the expected future spot rate differential. C) differ solely by the expected inflation differential. D) differ solely by the forward rate differential.
Employment tends to be
A) procyclical and less variable than real GDP. B) procyclical and more variable than real GDP. C) countercyclical and less variable than real GDP. D) countercyclical and more variable than real GDP.
An implicit cost is
A) a nonmonetary opportunity cost. B) a cost unique to sole proprietorships. C) a cost that involves spending money. D) a cost unique to corporations.
Below the short-run shutdown price, the firm
A. is earning negative economic profits. B. is making a normal rate of return on its capital investment. C. is earning positive economic profits. D. may be earning a positive or negative economic profits depending upon costs.