Marge buys 5 CDs and 7 DVDs. The marginal utility of the 5th CD and the marginal utility of the 7th DVD are both equal to 30 utils. Can we say that this is the optimal combination of CDs and DVDs for Marge?
A) No. We need to know her preferences for CDs and DVDs.
B) No. For this to be the optimal combination, the total utility from her purchase of CDs needs to equal the total utility from her purchase of DVDs.
C) No. If this was the optimal combination, the marginal utility per dollar of the 5th CD and the 7th DVD would be equal.
D) Yes.
C
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Refer to Figure 10-7. Suppose the price of Pilates sessions rise to $30 while income and the price of Yoga sessions remain unchanged. The substitution effect of this price change is represented by the movement from
A) A to B. B) A to C. C) A to D. D) D to B.
The banking system creates money in the sense that it: a. prints money
b. creates excess reserves from loans. c. creates loans from excess reserves. d. creates required reserves from loans. e. creates loans from required reserves.