Greg spends his entire budget on two goods: he plays video games at the mall arcade and he buys pizza. He discovers that his MU/P of video games is lower than his MU/P of pizza. From this, we know that he would be:
a. happier eating less pizza and playing fewer video games.
b. happier eating less pizza and playing more video games.
c. happier eating more pizza and playing fewer video games.
d. indifferent to which selection he makes.
e. as happy as possible, since he is already maximizing total utility.
c
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Use the following graph to answer the next question.
If the initial equilibrium interest rate was 5% and the money supply increased by $100 billion, then the new interest rate would be
A. 1%. B. 2%. C. 3%. D. 4%.
The goals of rate regulation have included the prevention of
A) monopoly profits. B) oligopolistic pricing. C) marginal cost pricing. D) average cost pricing.
When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic
a. True b. False Indicate whether the statement is true or false
An example of contractionary fiscal policy would be
a. cutting taxes b. decreasing government spending c. increasing production of consumer goods d. expanding the governments role in regulating private industry