As a unit of accounting, money is used
A. to pay off future debts.
B. to define prices of all other goods.
C. to hold purchasing power over time.
D. to exchange for goods and services.
Answer: B
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If a good has an external benefit, efficiency can be achieved by
A) leaving the market unregulated. B) monopolizing the market. C) offering a private subsidy on the good equal to the external benefit. D) imposing a tax on the good equal to the external benefit.
Billie spends all of her income on soccer balls and jeans, and the price of a pair of jeans is three times the price of soccer balls. In order to maximize total utility, Billie should
a. buy three times as many soccer balls as pairs of jeans. b. buy three times as many pairs of jeans as soccer balls. c. buy both items until the marginal utility of soccer balls is three times the marginal utility of a pair of jeans. d. buy both items until the marginal utility of a pair of jeans is three times the marginal utility of soccer balls.