If MUx / Px = MUY / PY, then _____
a. the consumer should purchase the same quantity of X and Y
b. the consumer should purchase less of X
c. the consumer is maximizing utility
d. the consumer should purchase more of Y
e. the consumer is minimizing utility
c
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In the money market, how is the adjustment to equilibrium brought about in the short run and in the long run?
What will be an ideal response?
Think of the situation of rolling two dice and let M denote the sum of the number of dots on the two dice. (So M is a number between 1 and 12.)
(a) In a table, list all of the possible outcomes for the random variable M together with its probability distribution and cumulative probability distribution. Sketch both distributions. (b) Calculate the expected value and the standard deviation for M. (c) Looking at the sketch of the probability distribution, you notice that it resembles a normal distribution. Should you be able to use the standard normal distribution to calculate probabilities of events? Why or why not? What will be an ideal response?