Suppose Joe is maximizing total utility within his budget constraint. If the price of the last pair of jeans purchased is $25 and it yields 100 units of extra satisfaction and the price of the last shirt purchased is $20, then, using the rule of equal
marginal utility per dollar spent, the extra satisfaction received from the last shirt must be
A) 2,000 units of utility.
B) 500 units of utility.
C) 100 units of utility.
D) 80 units of utility.
Answer: D
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The gross domestic product of Solvasa, a small island country, is U.S. $68 billion. The adult population of the country is 8.70 million and 11.3 million citizens are below 18 years of age. The output per capita of Solvasa is approximately equal to _____
a. $7,800 b. $3,400 c. $6,017 d. $5,201 e. $6,950
If economic recovery has already occurred by the time the effects of expansionary monetary policy are felt, it could cause an inflation problem rather than curing a recession problem
a. True b. False Indicate whether the statement is true or false