Tim spends his income on donuts (D) and coffee (C). Coffee is $2 per cup and donuts are $1 each. Assume that Tim has $10 to spend, and his utility function is given by (D, C)=D0.5C0.5 . For this utility function, D=0.5D−0.5C0.5 and C=0.5D0.5C−0.5 . a. Calculate the optimal number of donuts and coffee for Tim to purchase. Assume that he can purchase partial donuts or cups of coffee. Round answers to two places after the decimal where necessary.

The impact fiscal multiplier is a. usually estimated to have an average value of 2. b. usually estimated to have an average value of 0. c. the actual immediate multiplier effect of a fiscal policy action after taking into consideration direct fiscal offsets and other short-term crowding out of private spending. d. the multiplier effect of a fiscal policy action that applies to a long-run period after all influences on equilibrium real gdp have been taken into account.

Suppose that hubert, an economist from an am talk radio program, and kate, an economist from a nonprofit organization on the west coast, are arguing over government bailouts. the following dialogue shows an excerpt from their debate: kate: to recent financial crises, the concept of bailouts is a hot topic for debate among everyone these days. hubert: indeed, it’s gotten crazy! a government bailout of severely distressed financial firms is unnecessary because free markets will properly price assets. kate: i don’t know about that. without a bailout of severely distressed financial firms, the economy will experience a deep recession. the disagreement between these economists is most likely due todifferences in scientific judgments . despite their differences, with which proposition are two economists chosen at random most likely to agree? business managers can raise profit more easily by reducing costs than by raising revenue. central banks should focus more on maintaining low unemployment than on maintaining low inflation. employers should not be restricted from outsourcing work to foreign nations

Why entrepreneurs start businesses. a) monopolistic competition b) perfect competition c) sole proprietorship d) profit motive