For the economy to be in equilibrium
A. investment plus tax revenue must equal government purchases plus saving.
B. government purchases plus investment must equal saving plus tax revenue.
C. government purchases must equal the sum of tax revenue, saving and investment.
D. government purchases must equal tax revenue and saving must equal investment.
Answer: B
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Refer to Figure 10-9. If the consumer has $240 to spend on DVDs and CDs, what is the price of a CD if the budget constraint is BC2?
A) $8 B) $10 C) $20 D) $40
Lunch in Jamie's dorm is an all-you-can-eat buffet, served from 11 a.m. until 1 p.m. By noon, the buffet is picked over, and by 12:30, there are very few popular items left. The garbage bins, though, are full of food. If the cafeteria changed its policy so that students had to pay for each item chosen, students would:
A. encounter shortages earlier in the day. B. select only the most expensive items in the buffet. C. make the same selections as before, but eat more of what they select. D. only select an item if its marginal benefit is greater than or equal to its price.