Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Answer the following statement true (T) or false (F)


True

Marginal utility does represent the additional satisfaction from one more unit of a good, and it is found by dividing the change in total utility by the change in quantity.

Economics

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Lisa consumes only pizzas (P) and burritos (B). Her utility function is U = P0.5 B0.5. The price of per pizza is $10 and the price per burrito is $5. In equilibrium, Lisa consumes 4 pizzas

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Other things the same, an increase in the foreign price level

a. reduces the real exchange rate. This reduction could be offset by a decrease in the domestic price level. b. reduces the real exchange rate. This reduction could be offset by an increase in the domestic price level. c. increases the real exchange rate. This increase could be offset by a decrease in the domestic price level. d. increases the real exchange rate. This increase could be offset by an increase in the domestic price level.

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