Suppose your utility function is given by 
. What is your demand function for 
?
What will be an ideal response?
--- the ray from the origin on which the corners of all your indifference curves lie. You also have to satisfy your budget constraint 
Solving these two equations, we get
.
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Refer to Figure 16-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
A) decrease interest rates B) increase government spending C) contractionary fiscal policy D) increase taxes
Demand shows
a. the various quantities people are willing and able to buy at various prices, ceteris paribus. b. the various quantities people are able and willing to buy at various prices. c. the various prices people face when buying. d. how much people buy at one specific price.
Carl opens a 5-year CD for $1,000 that pays 3% interest compounded annually. What is the value of the CD at the end of five years?
a. $1,159 b. $1,126 c. $1,300 d. $1,150
If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?
A. The quantity of beef demanded will decrease. B. The quantity of beef supplied will increase. C. There will be a surplus of beef. D. There will be a shortage of beef.