Carla spends all her income on two goods: apples and bananas. The price of an apple is $2 and the price of a banana is $1 . If Carla's marginal utility of an apple is 4 and her marginal utility of a banana is 3, she should consume
a. more apples and fewer bananas to maximize total utility
b. more bananas and fewer apples to maximize total utility
c. more apples and more bananas to maximize total utility
d. fewer apples and fewer bananas to maximize total utility
e. exactly what she is consuming because she always makes the most rational choice each time she spends a dollar.
B
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Which of the following statements is true?
A) If the opportunity cost of current consumption is high, people will save less. B) If the opportunity cost of current consumption is high, the inflation rate will increase. C) If the opportunity cost of current consumption is high, the unemployment rate will decrease. D) If the opportunity cost of current consumption is high, people will save more.
If the real interest rate were -7%, this is:
a. A clear sign that it is better to borrow than to lend. b. Not clear sign that it is better to borrow than to lend because this decision depends on expected inflation. c. Actually, it is impossible for the real interest rate to be -7% because the real interest rate can approach zero, but it can never be less than zero. d. A clear sign that it is better to lend than to borrow.
Compared to a perfect competitor, the colluding oligopolist
A. charges a higher price. B. has a higher ATC and is therefore less efficient. C. restricts output. D. All of the choices are correct.
Which of the following is NOT an economic resource?
A. coal B. low-skilled labor C. company stock share D. an economist