If Px = Py, then when the consumer maximizes utility,
A) X must equal Y.
B) MU(X) must equal MU(Y).
C) MU(X) may equal MU(Y), but it is not necessarily so.
D) X and Y must be substitutes.
B
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Which of the following is NOT true of adverse selection?
A) It would not exist in a world of perfect information. B) It arises because borrowers typically know more than lenders. C) It describes a lender's problem of distinguishing the good-risk applicants from the bad-risk applicants. D) It describes a lender's problem in verifying borrowers are using their funds as intended.
During most of the 1990s, average hours worked per week ____, then, after 2000 . started to ____
a. rose steadily; level off b. remained virtually constant; drop slowly. c. were on the upswing; fall slowly. d. continued to decline; level off
Imagine an economy in which: (1) pieces of paper called yollars are the only thing that buyers give to sellers when they buy goods and services, so it would be common to use, say, 50 yollars to buy a pair of shoes; (2) prices are posted in terms of yardsticks, so you might walk into a grocery store and see that, today, an apple is worth 2 yardsticks; and (3) yardsticks disintegrate overnight, so
no yardstick has any value for more than 24 hours. In this economy, a. the yardstick is a medium of exchange but it cannot serve as a unit of account. b. the yardstick is a unit of account but it cannot serve as a store of value. c. the yardstick is a medium of exchange but it cannot serve as a store of value, and the yollar is a unit of account. d. the yollar is a unit of account, but it is not a medium of exchange and it is not a liquid asset.
A firm that has a great deal of control over the price of a good is said
A. to be in an antitrust position. B. to create an externality. C. to function in a black market. D. to have monopoly power.