The absolute value of the slope of an indifference curve equals the ratio of the marginal utilities of the two goods involved
What will be an ideal response?
True. The MRS can be represented as the ratio of both those quantities.
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We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves, for every market in the economy. This would not be a useful undertaking because
a. it would not be worth the increased level of complication and effort needed to collect all information b. the model would be simplistic c. the model would inevitably leave out important information d. the suggested prices would inevitably be wrong in each market e. the model would not be realistic
Answer the following questions true (T) or false (F)
1. Hyperinflations occur because governments want to spend more than they raise in taxes, and they pay for the extra purchases by printing money or selling large quantities of government bonds to the central bank. 2. In the United States, businesses are not required to accept cash as payment for goods or services. 3. The quantity equation becomes the basis for a theory when we assume that velocity of money is constant.
Two of the implications of large U.S. trade deficits for the United States are:
A. decreased current consumption and decreased indebtedness to foreigners. B. reduced budget deficits and decreased indebtedness to foreigners. C. reduced current consumption and higher saving. D. increased current consumption and increased indebtedness to foreigners.
If C = 1,200 + 0.8Y and I = 600, then planned saving equals planned investment at aggregate output level of
A. 6,800. B. 7,200. C. 9,000. D. 10,200.