The price of a piece of pizza is $1, and the price of a movie is $6. The consumer has purchased 2 pieces of pizza and 2 movies, and her marginal utility from the second piece of pizza is 20 and from the second movie is 120. The consumer has an income of $21. This combination of goods
A. maximizes utility because the marginal utility of the last dollar spent on each good is the same, but it is not an equilibrium because marginal utility is not zero.
B. is not an optimum because the consumer has not spent all of her money.
C. maximizes utility and is an optimum because the marginal utility of the last dollar spent on each good is the same.
D. is not an optimum because the marginal utility of the last dollar spent on each good is not the same.
Answer: B
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In 1943-1945
A. there was substantial unemployment in the U.S. B. there was substantial excess plant and equipment in the U.S. C. the U.S. had not yet completed its recovery from the depression. D. the U.S. was temporarily operating at a point beyond the production possibilities frontier.
When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays
A) constant average fixed costs. B) decreasing returns to scale. C) increasing returns to scale. D) constant returns to scale.
Tim's opportunity cost of selling his car is $20,000 . Rebecca, who is a likely buyer, values that car at $25,000 . Calculate the economic value this transaction can create if Rebecca pays $23,500 for Tim's car
a. $1,500 b. $5,000 c. $3,500 d. $2,000
What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?
a. The supply of and demand for loanable funds would shift right. b. The supply of and demand for loanable funds would shift left. c. The supply of loanable funds would shift right and the demand for loanable funds would shift left. d. None of the above is correct.