When income is allocated to two goods, x and y, consumer equilibrium occurs when
a. MUx = MUy
b. MUx = MUy, and the budget is exhausted
c. MUx/Py = PUx/Py
d. MUx/Py = PUx/Py, and some money is not spent
e. MUx/Py = PUx/Py, and the budget is exhausted
E
You might also like to view...
When comparing a $100 billion increase in government expenditure to a $100 billion decrease in tax revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease. B) equal to the effect of the tax decrease. C) less than the effect of the tax decrease. D) positive whereas the effect of the tax decrease is negative. E) negative whereas the effect of the tax decrease is positive.
When accounting profits are zero, which of the following is most likely to be true?
A. Economic profits could be zero. B. Economic profits could be positive. C. Economic profits are negative. D. All of these are likely.
Richstone Bakery reduces the price of wheat bread from $2 to $1 and finds that quantity demanded increases from 100 to 120 loaves. Richstone calculates that the price elasticity of demand for wheat bread is (approximately)
a. 0.00 b. 0.30 c. 5.00 d. 10.5 e. 2.00
Economic theory predicts that the price of a depletable resource will rise as it becomes more scarce
a. True b. False Indicate whether the statement is true or false