In order for a consumer to choose between two different goods, he has to take into consideration the
A. marginal utility of production.
B. marginal utility divided by the price.
C. total utility divided by price.
D. marginal utility plus the price.
Answer: B
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When the price of a product decreases, the purchasing power of our income increases and thus permits consumers to purchase more of the product. This statement describes
A. the income effect. B. an inferior good. C. the rationing function of prices. D. the substitution effect.
?Within the simple Keynesian Cross model, equilibrium takes place:
A. ? at full employment. B. ?when aggregate spending equals real disposable income. C. ?when the money interest rate and real interest rate are equal. D. ?when actual and expected rates of inflation are equal.
If a person has an absolute advantage in some activity, she must have a comparative advantage in that activity as well.
Answer the following statement true (T) or false (F)
Refer to Figure 29-1. The depreciation of the dollar is represented as a movement from
A) B to C. B) B to A. C) D to C. D) A to C. E) A to B.