Refer to the indifference curve in Figure 3.3. Which of the following statements about marginal utility (MU) is correct?

If you take out a bank loan prior to unanticipated inflation

A) your bank will gain at your expense. B) you will gain at the expense of your bank. C) it will be harder for you to repay the loan because of the inflated dollar. D) neither you nor your bank will be affected, because the loan was made prior to the inflation.

Theory A predicts that the higher the opportunity cost of having a child, the fewer children a woman will have. Which of the following is evidence against the theory if opportunity cost is measured in terms of foregone salary?

A) women with high-paying jobs have more children than women with low-paying jobs. B) women with low-paying jobs have more children than women with high-paying jobs. C) men married to women with high-paying jobs want more children than men married to women with low-paying jobs. D) the mothers of women with high-paying jobs will want their daughters to have children more than the mothers of women with low-paying jobs will want their daughters to have children. E) none of the above