A utility-maximizing consumer who is considering two goods, x and y, would allocate her budget in such a way that
a. MUx = MUy
b. MUx > MUy
c. MUx/Px > MUy/Py
d. MUx/Px = MUy/Py
e. MUx/Px < MUy/Py
D
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Which has a larger effect on aggregate demand: an increase in government expenditure or an equal sized decrease in taxes? Explain your answer
What will be an ideal response?
Which of the main economic schools of thought would believe that the government should undertake a tax policy stressing work and investment incentives?
A. Rational expectations B. Classical C. Supply-side D. Keynesian
If public goods were marketed like private goods, then
A. Public goods would be efficiently produced. B. Society would be closer to achieving the optimal mix of output. C. People would avoid paying for these goods. D. Market failure would not occur.
Monopolistically competitive industries are characterized by no barriers to entry.
Answer the following statement true (T) or false (F)