Ms. Birnbaum is buying bottles of beer and bags of pretzels. The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30. The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag. Ms. Birnbaum
A. is not spending all her income.
B. should buy more pretzels and less beer.
C. is buying beer and pretzels in the utility-maximizing amounts.
D. should buy more beer and fewer pretzels.
Answer: D
Economics
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Policy activists' hope that they can undertake successful stabilization policy is ________ by the fact that natural real GDP ________ during recessions
A) improved, falls B) worsened, falls C) improved, increases D) worsened, increases
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Economics