Economic growth can best be portrayed as a:
A. leftward shift of the production possibilities curve.
B. movement from a point near the vertical axis to a point near the horizontal axis on the production possibilities curve.
C. movement from a point inside to a point outside of the production possibilities curve.
D. rightward shift of the production possibilities curve.
Answer: D
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Modern hedge funds typically make investments that involve
A) hedging. B) speculating. C) acquiring safe, short-term assets. D) focus on stocks instead of bonds.
Joseph has the utility function U(F,H) = 10F2H, where F is the quantity of food he consumes per year and H is the quantity of housing per week. Suppose the price of food is $10 and the price of housing is $5, while Joseph has an income of $150/week
a. Calculate Joseph's MRS as a function of the quantities F and H. b. Write out Joseph's constrained optimization problem with the information provide d. c. Using the substitution method, solve for Joseph's optimal consumption bundle of food and housing. d. Show that at the optimum, Joseph consumes the bundle along the budget constraint where MRS = MRT.