John is currently spending all of his income. For the last unit of Good X consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good X is $10. The price of Good Y is $5. If John wants to maximize his utility
he should
A) continue to purchase the same amount of Good X and Good Y.
B) increase the consumption of Good X and decrease the consumption of Good Y.
C) decrease the consumption of Good X and increase the consumption of Good Y.
D) decrease the consumption of Good X and decrease the consumption of Good Y.
Answer: A
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Using the UIP equation, equilibrium in the short run occurs when
a) arbitrage is possible b) the spot rate is such that foreign and domestic investment returns are equalized c) the spot rate and forward rate are equalized d) foreign interest rates and domestic interest rates are equalized
"If Michigan's electric utilities were allowed to use marginal cost pricing, it would lead to economic profits for these utilities." Is the previous statement correct or incorrect? Explain your answer
What will be an ideal response?