Normative economics is:
a. usually incorrect.
b. a statement of fact.
c. the analysis of what is.
d. the study of what ought to be.
e. free of value judgments.
d
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Sam consumes only sandwiches and soda and maximizes his total utility. Suppose that the price of a sandwich falls. At the new consumer equilibrium, Sam substitutes ________ for ________
Sam's marginal utility from soda ________ and his marginal utility per dollar spent on sandwiches ________. A) sandwiches; soda; increases; increases B) soda; sandwiches; decreases; increases C) sandwiches; soda; increases; decreases D) soda; sandwiches; stays the same; stays the same
If the price of the Brazilian real is 60 cents and a U.S. resident purchases a Brazilian-manufactured item for 60,000 real, there will be
A) a quantity demanded of 60,000 real and a quantity supplied of $60,000. B) a quantity demanded of 60,000 real and a quantity supplied of $36,000. C) a quantity demanded of 60,000 real, but we cannot determine the effect in the market for dollars. D) a quantity supplied of 60,000 real and a quantity demanded of 60,000 yen.