Joe consumes pizza and movies. He is currently spending his entire income and his marginal utility of pizza is 15 and his marginal utility of movies is 10
If the price of a pizza is $10 and the price of a movie is $5, then to maximize his utility Joe should A) increase consumption of pizza and decrease consumption of movies.
B) increase consumption of movies and decrease consumption of pizza.
C) not change his current bundle of movies and pizza.
D) increase consumption of both goods.
B
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What does the HO model predict will happen to the real returns to factors of production after trade occurs?
a. Labor and capital must be used together in production, and there is no room for competition for remuneration. b. Capital owners always get the "gains from trade." c. Resources used intensively in export industries (such as labor in China and capital in the United States) will see an increase in their returns, whereas the resources used intensively in importcompeting industries will see a decline in their return. d. Poor nations will always get the least returns to their factors of production.
Olivia must decide whether or not to go to college. She can either continue to work as a waitress and earn $22,000 per year or she can go to school and expect to earn $32,000 per year when she finishes. She should
a. continue to work as a waitress. b. go to school, but only if she knows she can finish in four years. c. go to school no matter what. d. we cannot tell since there may be important nonmonetary considerations that Olivia will take into account.