Answer the following questions true (T) or false (F)
1. A consumer maximizes her total utility from a bundle of goods when her marginal utility from each good is equal.
2. The economic model of consumer behavior explains how consumers' tastes and preferences are formed.
3. To maximize utility consumers should buy goods and services to the point where the marginal utility of each item consumed is maximized.
1. FALSE
2. FALSE
3. FALSE
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As a result of the recent financial crisis, some analysts believed that the MPC in the U.S. declined. If this is true, the value of the multiplier is now
A. smaller. B. larger. C. the same. D. magnified to a larger amount.
Explain this quote from Adam Smith: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but from their regard to their own interest.”
Please provide the best answer for the statement.
Which of the following is a problem that arises when trying to classify regional trade agreements?
A) Many agreements combine elements from different categories. B) The definition of free trade area includes that of a customs union. C) Some agreements include cultural issues while others do not. D) The most favored nation clause includes all of them.
In the market for euros, a decrease in U.S. imports from Europe tends to
A. increase excess demand. B. decrease equilibrium price. C. cause no change in equilibrium price. D. increase equilibrium price.