UOP ECO 561 Final Exam Guide (New, 2017)

the income and substitution effects associated with each are equal
their marginal and total utilities are proportionate
their total utilities are the same
their marginal utilities are the same
16 Macroeconomics approaches the study of economics from the viewpoint of:
governmental units
the entire economy
individual firms
the operation of specific product and resource markets
17 Mrs. Arnold is spending all her money income by buying bottles of soda and bags
of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and
the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are
$.60 per bottle and $.40 per bag respectively. It can be concluded that:
Mrs. Arnold should spend more on soda and less on pretzels
Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts
the two commodities are substitute goods
Mrs. Arnold should spend more on pretzels and less on soda
18 The simple circular flow model shows that:
households are on the selling side of the resource market and on the buying side of
the product market.
businesses are on the selling side of both product and resource markets.
households are on the buying side of both product and resource markets.
businesses are on the buying side of the product market and on the selling side of
the resource market.
19 Assume the reserve ratio is 25 percent and Federal Reserve Banks buy $4 million
of U.S. securities from the public, which deposits this amount into checking
accounts. As a result of these transactions, the supply of money is:
directly increased by $4 million and the money-creating potential of the commercial
banking system is increased by an additional $16 million.
not directly affected, but the money-creating potential of the commercial banking
system is increased by $12 million.
directly increased by $4 million and the money-creating potential of the commercial
banking system is increased by an additional $12 million.
directly reduced by $4 million and the money-creating potential of the commercial
banking system is decreased by an additional $12 million.