You wish to buy only one CD. Use the rule of equal marginal utility per dollar to determine which one to purchase:
(a) Drake's latest CD for $15 which gives you 75 units of utility, or (b) Bob Dylan's "Shadows in the Night" for $10 that gives you 100 units of utility?
You should buy the Bob Dylan CD because the MU per dollar is 10 while MU per dollar for the Drake CD is only 5.
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If a check written on one bank is deposited in another bank
A) new reserves are created for the banking system. B) the money supply decreases. C) the money supply remains unchanged. D) the money supply increases.
Refer to the table below. Suppose the perfectly competitive market for dairy products had a 40 percent chance of a high price of $3.00 and a 60 percent chance of a low price of $2.00. However, both Happy Cows and Free Cows have revised their probabilities and now believe that the probability of a high price of $3.00 is 80 percent and the probability of a low price of $2.00 is 20 percent. If the
managers of Free Cows want to maximize expected profit based on the new probabilities by how much will they change the quantity produced?
Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels.
A) Free Cows will increase their production by 40 units.
B) Free Cows will decrease their production by 40 units
C) Free Cows will decrease their production by 20 units.
D) Free Cows will increase their production by 20 units.
Which of the following is true of adverse selection? a. It can result when one of the parties to a transaction has little information about the quality of the goods involved. b. It can cause the quality of goods traded to fall, if quality detection costs are high
c. It can be a difficult problem to overcome, because it is not individually rational for the transactor with the superior information to provide a truthful and complete disclosure. d. All of the above are true.
A change in the price of a good has no effect on the supply schedule
a. True b. False Indicate whether the statement is true or false