At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts
Currently, her marginal utility per dollar from doughnuts is 14 and her marginal utility per dollar from coffee is 10. Is Hannah maximizing her total utility? A) No, she needs to buy more doughnuts and less coffee.
B) No, she needs to buy more coffee and fewer doughnuts.
C) Yes, she is maximizing utility.
D) No, she needs to buy fewer doughnuts and less coffee.
A
You might also like to view...
Because economic profits are eliminated in the long run in monopolistic competition, to earn an economic profit firms continuously
A) shut down. B) exit the industry. C) innovate and develop new products. D) declare bankruptcy. E) decrease their costs by decreasing their selling costs.
The more excess reserves banks choose to keep,
A) the larger the deposit multiplier. B) the smaller the deposit multiplier. C) the lower the required reserve ratio. D) the higher the required reserve ratio.
The analysis of the competition between Apple and Samsung in the smartphone market is based on
A) microeconomic model. B) educated guessing. C) intuitive reasoning. D) consumer surveys.
Other things being equal a recession is likely to
A. have no effect on federal receipts or outlays. B. increase federal outlays but have no effect on federal receipts. C. decrease both federal outlays and receipts. D. increase federal outlays and reduce federal receipts.