The marginal utility per dollar that Harold Stratton receives from oranges is greater than the marginal utility per dollar Harold receives from pears. To maximize his utility, what should Harold do?
A) He should buy fewer pears and more oranges.
B) He should buy fewer oranges and more pears.
C) He should reduce his consumption of both oranges and pears so that he can buy a greater variety of goods.
D) He should acquire more income so that he can afford to buy more oranges and pears.
A
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Automatic stabilizers decrease the impact of a recession on the level of economic activity because they
A) reduce the interest rate and so allow firms to increase their level of investment. B) mean disposable income does not change by as much as real GDP. C) increase taxes so the budget is always balanced. D) raise the exchange rate so U.S. exports become more attractive to foreigners. E) increase the quantity of money in circulation.
The Federal payroll (Social Security) tax:
A. Increases the progressivity of the Federal tax system B. Offsets some of the progressivity of the Federal tax system C. Offsets some of the regressivity of the Federal tax system D. Decreases the proportionality of the Federal tax system