Jane is attempting to maximize utility by selecting a market basket of goods. For each of the goods in the market basket the marginal utility per dollar spent is equal
There are some goods which are affordable but do not appear in the Jane's market basket. If Jane has maximized utility, the marginal utility per dollar spent on each of the goods that does not appear in the market basket is: A) too high.
B) too low.
C) zero.
D) infinite.
E) none of the above
B
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If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent
A) your employer would have gained at your expense. B) your real wage will increase, but your nominal wage will decrease. C) the purchasing power of your wages will not change, since purchasing power is based on your nominal wage. D) the purchasing power of your real wages would be more than you anticipated.
The opportunity to exploit economies of scale is one of the gains to be derived by removing tariffs and other trade distortions. These gains will be the result of a decrease in
A) world prices of imports. B) the consumption distortion loss triangle. C) the production distortion loss triangle. D) international labor mobility. E) excessive entry and inefficient business practices.