Suppose you have a limited money income and you are purchasing products A and B, whose prices happen to be the same. To maximize your utility, you should purchase A and B in such amounts that:
A. their marginal utilities are the same.
B. their total utilities are the same.
C. their marginal and total utilities are proportionate.
D. the income and substitution effects associated with each are equal.
Answer: A
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Which of the following generates demand for foreign currencies?
A. Exports from the United States to foreign countries. B. The purchase by foreigners of bonds issued by the U.S. government. C. Expenditures by Americans traveling abroad. D. Transfers of money from foreigners to relatives in the United States.
An improvement in managerial efficiency in a Fortune 500 corporation increases the marginal revenue product of all people working for the corporation. Assuming that the wage of workers who are hired in a competitive labor market remains constant, the company will
A. fire some workers. B. hire some workers. C. neither increase nor decrease the number of workers employed. D. shut down unless it can lower wages.