John is currently spending all of his income. For the last unit of Good X consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good X is $10. The price of Good Y is $5. If John wants to maximize his utility
he should
A) continue to purchase the same amount of Good X and Good Y.
B) increase the consumption of Good X and decrease the consumption of Good Y.
C) decrease the consumption of Good X and increase the consumption of Good Y.
D) decrease the consumption of Good X and decrease the consumption of Good Y.
Answer: A
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The vertical distance between a firm's average total cost curve and its average variable cost curve is its
a. marginal cost b. sunk cost c. total variable cost d. total fixed cost e. average fixed cost
Indifference curves are typically shaped like total utility curves
Indicate whether the statement is true or false
If the economy is in an inflationary boom, the Fed would most likely
a. encourage banks to provide loans by buying government securities. b. encourage banks to provide loans by raising the discount rate. c. encourage banks to provide loans by selling government securities. d. restrict bank lending by selling government securities. e. restrict bank lending by lowering the federal funds rate.
Which statement is true?
A. Private business firms are illegal in China. B. In China today, there is strict adherence to the communist credo, "From each according to his ability, to each according to his needs." C. Major economic reforms in China in the late 1970s and early 1980s created a much more market oriented economy than a centrally planned one. D. None of the statements are true.