In drawing a budget line it is assumed that:
A) consumer preferences are fixed.
B) the prices of the two products are variable.
C) money income is fixed.
D) consumer willingness to substitute between the two products is fixed.
Ans: C) money income is fixed.
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In the Keynesian model, whenever planned saving exceeds planned investment
A) the interest rate will remain unchanged. B) there will be unplanned inventory depletion. C) real GDP will not be influenced. D) there will be unplanned inventory accumulation.
A ten-year-old boy spent his allowance on a soccer ball and a baseball glove. He said he could not be happier buying anything else. The price of the ball was $5, while the price of the glove was $10 . If the marginal utility he received from the ball was 15 utils, then:
a. the marginal utility he received from expenditure on the glove was 3 utils. b. the marginal utility he received from expenditure on the glove was 30 utils. c. the total utility per dollar he received from expenditure on the glove was 3 utils. d. the total utility per dollar he received from expenditure on the glove was 10 utils. e. the marginal utility he received from the expenditure of the glove was 10 utils