Joe's income is $500, the price of food (F) is $2 per unit, and the price of shelter (S) is $100. Which of the following represents his budget constraint?
A) 500 = 2F + 100S
B) F = 250 - 50S
C) S = 5 - .02F
D) All of the above
D
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Game theory assumes that to compute the likely outcome of games, one needs to assume that players act
a. Rationally b. Optimally c. In their own self-interest d. All the above
A bracelet making company has three employees, and together they produce 10 bracelets an hour. When a fourth worker joins them, the output for the company is now 11 bracelets an hour. Which of the following is true?
A. Diminishing marginal product started with the fourth worker. B. Average product has increased. C. Total product is increasing. D. None of these is true.
If the economy is in an inflationary gap, which of the following is the least appropriate policy mix?
a. a budget surplus and expansionary monetary policy b. a budget deficit and expansionary monetary policy c. a budget deficit and contractionary monetary policy d. a budget surplus and contractionary monetary policy
When examining the financial status of households, wealth is
A) synonymous with income. B) a flow variable whereas income is a stock variable. C) a stock variable and includes both tangible assets and human capital. D) not as important as income because wealth does not change over time.