Tyrell has $50 per week to spend on good A, which has a price of $5, and good B, which has a price of $4 . He buys six units of A and five of B. The marginal utility of the sixth unit of A is 25, and the marginal utility of the fifth unit of B is 20 . Which of the following is true?
a. He is maximizing his utility.
b. We cannot tell if he is maximizing his utility unless we know his total utility.
c. He is not maximizing his utility and should buy more of A.
d. He is not maximizing his utility and should buy more of B.
e. He is not maximizing his utility because he is not spending all of his income.
A
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Describe the recession phase of a business cycle, including when it begins and when it ends
What will be an ideal response?
The Fed's low short-term interest rate policy from 2002-2004, along with housing regulations promoting low down-payment loans to sub-prime borrowers, encouraged
a. conventional 30-year, fixed rate mortgages which have relatively high default and foreclosure rates. b. conventional 30-year, fixed rate mortgages which have relatively low default and foreclosure rates. c. adjustable rate mortgages which have relatively low default and foreclosure rates. d. adjustable rate mortgages which have relatively high default and foreclosure rates.