A consumer has maximized his or her utility by consuming
A) at the midpoint of the budget constraint line.
B) at the midpoint of the demand curve.
C) so that the total utility of all goods consumed is the same.
D) so that the ratio of marginal utility to price is the same for all goods consumed.
D
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A modified version of utilitarianism proposed by John Rawls states that
A) the distribution of the economic pie is fair if the rules are fair. B) the distribution of the economic pie is fair if it achieves the greatest happiness for the greatest number of people. C) the fair distribution of the economic pie is the one that makes the poorest person as well off as possible. D) goods may be transferred from one person to another only by voluntary exchange.
If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer
a. is less willing to trade away a good when he has a lot of it. b. is more willing to trade away a good when he has a lot of it. c. always tries to keep the percentage of his budget spent on each good constant. d. views one of the goods as inferior.
In the short run, the profitability of monopolistic competition _______ that of perfect competition; in the long run the profitability of monopolistic competition _______ that of perfect competition.
Fill in the blank(s) with the appropriate word(s).
When consumers are less confident about their jobs or incomes, they are more likely to
A) reduce purchases of durable goods than nondurable goods. B) reduce purchases of nondurable goods and increase purchases of durable goods. C) increase investment spending and decrease consumption spending. D) increase consumption spending and decrease investment spending.