At his current level of consumption, Evan gets twice as much marginal utility from an additional bottle of water as that from an additional bottle of soda. If the price of soda is $1.00 per bottle, then Evan is maximizing utility if the price of a bottle of water is:
A. $1.50
B. $2.00
C. $0.50
D. $1.00
Answer: B
You might also like to view...
In the long-run equilibrium, a firm's price definitely equals its average total cost in
A) both monopoly and monopolistic competition. B) neither monopoly nor monopolistic competition. C) monopoly but not monopolistic competition. D) monopolistic competition but not monopoly.
In first degree price discrimination,
a. each consumer pays the same price. b. all consumer surplus is captured by the seller. c. the seller separates the buyers into different groups. d. the seller charges different prices per unit for different quantities.
The "capture" in the capture hypothesis occurs because
A) regulators try to promote everyone's best interest. B) society doesn't care for regulatory agencies. C) regulators always know what is in society's best interest. D) regulators usually have been or will be associated with the industries they regulate.
An increase in U.S. imports from Mexico will cause a decrease in income for Mexican individuals and businesses
a. True b. False Indicate whether the statement is true or false