The ratio of the marginal utility of coffee to the marginal utility of donuts is four for an individual maximizing utility. This implies that
A. this person always eats donuts with coffee.
B. the coffee to donuts price ratio is four to one.
C. a donut is four times more valuable than a cup of coffee.
D. the coffee to donuts price ratio is one to four.
Answer: B
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A country exports a good if
A) it has a high opportunity cost of production. B) the world price of the good is above the country's no-trade equilibrium price. C) the quantity demanded of the good in the country is greater than the quantity supplied at the world price. D) it cannot import the good. E) the world price of the good is below the country's no-trade equilibrium price.
Last week, six Swedish kronor could purchase one U.S. dollar. This week, it takes eight Swedish kronor to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the United States to Sweden and ________ U.S
aggregate demand. A) increase; increase B) decrease; increase C) increase; decrease D) decrease; decrease
Pricing is made difficult by
A) firms having multiple products. B) concerns about the response of competitors. C) concerns about consumer linkages of price and quality. D) all of these choices make pricing difficult.
The amount of a product that people are willing and able to purchase at a specific price is referred to as the:
a. demand. b. quantity demanded. c. law of demand. d. consumption function. e. purchasing power.