In the theory of consumer choice, when a person is choosing which good or service to consume, how does he or she select the units of good or service to consume?
a. The person selects the good or service based on need
b. The person selects the units of a good or service that generates the greatest marginal utility. This process continues until there budget is spent.
c. The person selects the units of a good or service that generates the greatest marginal utility per dollar spent. This process continues until the person's budget is spent.
d. The person randomly selects what they buy until the budget is spent.
c
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Several firms in an industry laid off their workers. Assuming all else equal, this will lead to a ________
A) higher rate of output in the industry B) higher rate of capacity utilization in the industry C) lower rate of capacity utilization in the industry D) higher real wage in the industry
Which of the following is considered contractionary fiscal policy?
A) The New Jersey legislature cuts highway spending to balance its budget. B) Legislation removes a college tuition deduction from federal income taxes. C) Congress increases the income tax rate. D) Congress increases defense spending.
Under a fixed exchange rate system, the central bank must
a. have an unlimited supply of domestic currency. b. have a very large supply of foreign assets. c. follow a constant money growth rule. d. allow the money supply to adjust to keep interest rates and exchange rates unchanged.
If a college graduate makes $10,000 more than a high school graduate, we can safely say that the education imparted in college adds $10,000 to an individual's income
a. True b. False