Tom is buying a quantity of wheat at which the marginal utility (in dollars) exceeds price. He should
A. reduce wheat consumption, thus raising P to the level at which MU = P.
B. reduce wheat consumption, thus raising MU to the level at which MU = P.
C. increase wheat consumption, thus raising P to the level at which MU = P.
D. increase wheat consumption, thus lowering MU to the level at which MU = P.
Answer: D
You might also like to view...
An increase in interest rates will cause investment to
A) increase. B) decrease. C) not change. D) move erratically, depending on the interest rate effect on saving.
Subsidies can destroy wealth because
a. subsidies move assets from lower- to higher- valued uses b. subsidies move assets from higher- to lower- valued uses c. subsidies help producers only d. subsidies help consumers only
Economies and diseconomies of scale are the reasons why short-run average total cost decreases and then increases
a. True b. False Indicate whether the statement is true or false
In the ______________, households receive goods and services and pay firms for them.
A. labor market B. financial capital market C. goods and services market D. savings market