As a consumer allocates income between good A and good B, total utility is maximized when
a. the marginal utility of A = the marginal utility of B
b. the marginal utility of A = the marginal utility of B = 0
c. the price of A = price of B
d. marginal utility of A/price of A = marginal utility of B/price of B = 0
e. marginal utility of A/price of A = marginal utility of B/price of B
E
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In the short run, the equilibrium level of real GDP
A) is necessarily less than potential GDP. B) is necessarily equal to potential GDP. C) is necessarily greater than potential GDP. D) could be less than, equal to, or greater than potential GDP.
One factor hastening the demise of the Soviet Union was _____
a. its military alliance with Cuba b. its attempt to keep up with the United States in an arms race c. its inability to predict the optimal amount of defense spending d. its strong economic output
Since a monopolist firm will lose some customers when the price is increased, it will make every effort to keep the price as low as possible.
Answer the following statement true (T) or false (F)
Saving is always equal to:
A. planned investment less unintended increases in inventories. B. actual investment. C. planned investment. D. unintended changes in inventories.