The ratio of the marginal utility of coffee to the marginal utility of donuts is four for an individual maximizing utility. This implies that
A. the coffee to donuts price ratio is one to four.
B. this person always eats donuts with coffee.
C. a donut is four times more valuable than a cup of coffee.
D. the coffee to donuts price ratio is four to one.
Answer: D
You might also like to view...
The market pricing system corrects an excess supply by.
a. raising the product price and increasing producer profits. b. lowering the product price and decreasing producer profits. c. raising the product price and decreasing producer profits. d. lowering the product price and increasing producer profits.
Exhibit 2-15 Production possibilities curve
In Exhibit 2-15, the shape of the production possibilities curve demonstrates:
A. changing prices. B. economic growth. C. decreases in resources. D. the law of increasing opportunity costs.
In the balance of payments, any transaction that leads to a receipt by a resident of a country or its government is a(n)
A) asset. B) minus item. C) deficit item. D) surplus item.
The above figure shows the cost curves for a typical firm in a competitive market. If p = 10, then
A) the firm will maximize its profit by producing 5 units. B) the firm will maximize its profit by producing 60 units. C) producing 5 or 60 units will yield equal profits. D) Not enough information.