For two goods, coffee and scones, suppose that MU(coffee)/P(coffee) = 4 and MU(scones)/P(scones) = 3. To maximize your total utility from these two goods, you should purchase:
A. less coffee and more scones.
B. more coffee and fewer scones.
C. more coffee and more scones.
D. less coffee and fewer scones.
Answer: B
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Which of the following would empirically support the claim that slave owners were optimistic about the future of the slave system in the 1850s?
(a) Rising slave prices (b) An increasing demand for slaves (c) A positive net return to slave purchases (d) All of the above
The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20th century primarily because
a. it provided the only logically consistent view of what caused the Great Depression. b. it provided a reasonable explanation of what went wrong during the Great Depression and what could be done to prevent it from happening again. c. it explained how gross domestic product could be measured and why this was important. d. it derived the conditions necessary for maximum efficiency of resource use and explained how these conditions could be achieved through central planning.
A marginal change is a
a. change that involves little, if anything, that is important. b. large, significant adjustment. c. change for the worse, and so it is usually a short-term change. d. small, incremental adjustment.
The claim that reducing deficits in an economy with high rates of unemployment will help even in the short run by improving confidence is called:
A) quantitative easing. B) fiscal stimulus. C) expansionary austerity. D) a credit crunch.