Your Marginal Utility of a Third Waffle Is 10 and Your

question 140

Multiple Choice

Your marginal utility of a third waffle is 10 and your marginal utility of a second piece of ham is 30.If you eat the third waffle, which of the following must be true?

• A)You are irrational.
• B)You prefer waffles.
• C)The price of a waffle is less than one third the price of a piece of ham.
• D)The price of a waffle is more than the price of a piece of ham.
• E)The price of a waffle is three times the price of a piece of ham.

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Definitions:

Excess Reserves

The reserves that banks hold over and above the legal requirement set by the central bank, available to lend or invest.

Income-producing Assets

Assets that generate revenue over time, such as rental properties, stocks, or bonds.

Banking Regulators

Agencies or bodies responsible for overseeing banks and ensuring the stability, safety, and compliance of the banking sector.

Federal Funds Market

A financial market that allows banks to borrow or lend excess reserves to one another, typically overnight, at an interest rate called the federal funds rate.