Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Bobby currently buys 2 pizzas and 6 CDs
To maximize his utility in the next period, he should A) buy more pizza and fewer CDs.
B) buy more CDs and fewer pizza.
C) buy more of both goods.
D) stay with the current combination of goods.
A
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The sustainable upper limit of real GDP is a level of GDP that is
A) greater than potential GDP, but by how much greater is unknown and controversial. B) less than potential GDP, but by how much less is unknown and controversial. C) potential GDP. D) determined only by what is the full employment equilibrium in the labor market. E) None of the above answers is correct because there is no sustainable upper limit to real GDP because real GDP can always be increased.
Which of the following summarizes the "incentive problem" with gift-giving that Professor Tabarrok discusses in the video?
A. Gift-giving reduces the incentives for people to rely on market transactions. B. When people choose gifts, they have little incentive to choose carefully. C. When people buy gifts, they have an incentive to overspend to send a signal that they are generous. D. People have little incentive to purchase a gift unless they expect a gift in return.