The last Big Mac that Eva consumes costs $2.00 and gives her 24 units of utility. The last Whopper she consumes costs $1.50 and gives her 18 units of utility. Eva is maximizing her utility. If the price of the Whopper falls to $1.30 and given diminishing marginal utility, Eva should:
A. keep consuming the current amounts of both Big Macs and Whoppers.
B. realize that she doesn't have enough information to answer the question.
C. consume more Whoppers and fewer Big Macs.
D. consume more Big Macs and fewer Whoppers.
Answer: C
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The famous phrase "the invisible hand" is associated with the economist ______________ ____________.
Fill in the blank(s) with the appropriate word(s).
Which group of individuals most likely benefits from rent controls?
A) the unemployed who fail to obtain rental housing B) low-income wage earners who fail to obtain rental housing C) single parent families without savings or other financial assets who fail to obtain rental housing D) upper-income professionals who rent apartments at the price ceiling rate
If you believe that a worker should be paid on the basis of what he or she produced, you believe in
A. the egalitarian principle. B. the comparative worth principle. C. the benefits standard. D. the productivity standard.
A firm hires labor, capital, and land to produce grapefruits. Currently the marginal product of the last unit of labor input is 40, the marginal product of the last unit of capital input is 60, and the marginal product of the last unit of land input is 200. The market wage is $20 and the market price for capital is $30. If the firm is using the optimal combination of inputs, then the price of land is
A. $4. B. $40. C. $100. D. indeterminate from the given information.