Suppose Bart's MRS for sodas with chips is 6 bags of chips per soda. Also assume that Lisa's MRS for sodas with chips is 8 bags of chips per soda. Assuming that these rates of substitution don't depend on the amounts consumed, which of the following trades would make Bart and Lisa better off?
A. Bart gives Lisa 9 bags of chips in exchange for a soda.
B. Bart gives Lisa 7 bags of chips in exchange for a soda.
C. Bart gives Lisa 6 bags of chips in exchange for a soda.
D. None of these trades is mutually beneficial.
D. None of these trades is mutually beneficial.
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When we export goods to foreign countries, we
A) receive payments from the rest of the world. B) make payments to the rest of the world. C) increase our inflation rate. D) decrease our inflation rate.
Many state and local governments find themselves faced with increasing retirement expenditures for retired government employees. These increasing expenditures will ________ GDP because they are categorized as ________
A) increase; government purchases B) increase; gross private domestic investment C) decrease; state and local government purchases D) not change; transfer payments.