Use the following table to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents each and hard candies cost 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following table.Number of ItemsMarginal Utility of ChocolatesMarginal Utility of Hard Candies160150250140340120430100520806107075508020If Cloe buys either chocolates or hard candies one piece at a time, what will be her first two purchases?
A. a chocolate, followed by another chocolate
B. a hard candy, followed by another hard candy
C. a hard candy, followed by a chocolate
D. a chocolate, followed by a hard candy
Answer: B
You might also like to view...
Flexible exchange rates exist when
A) no one knows what the true value of a currency is. B) governments and central banks spend foreign reserves to prop up an exchange rate at a certain level. C) exchange rates are determined by forces of supply and demand. D) speculators bet that a currency will soon be depreciated.
The law of demand holds that as prices of goods decrease, people are willing to buy more
a. True b. False Indicate whether the statement is true or false
The table below shows the cyclically adjusted budget deficit as a percentage of GDP over a five-year period.YearDeficit(-)11.5%21.432.041.851.5Refer to the above information. In which year(s) was fiscal policy contractionary?
A. Year 3 only B. Years 2, 4, and 5 C. Year 2 only D. Years 1, 2, and 5
Refer to the information provided in Table 24.8 below to answer the question(s) that follow.Table 24.8All Figures in Billions of DollarsOutput (Income)Net TaxesConsumption Spending (C = 100 + 0.9Yd)SavingsPlannedInvestment PurchasesGovernment Spending2,6001002,3501501502002,8001002,5301701502003,0001002,7101901502003,2001002,8902101502003,4001003,0702301502003,6001003,2502501502003,8001003,430270150200Refer to Table 24.8. The economy is at the equilibrium level of output. If government spending decreases by $50 billion, the new equilibrium level of output is
A. $3,100 billion. B. $2,400 billion. C. $1,550 billion. D. $1,450 billion.