According to the text, can we conclude that people will consume goods until the marginal utility of each good is zero?
A. No, because consumption is determined by total utility.
B. No, because consumption is determined by the marginal utility/price ratio.
C. Yes, because at that point marginal utility is minimum.
D. Yes, because at that point total utility is maximum.
Answer: B
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The joining of firms that are producing or selling a similar product is known as
A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) economies to scale.
If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:
a. there isn't enough room in the factory. b. there isn't an infinite number of workers. c. wages would have to increase. d. they stop when MRP = wage e. marginal revenue product will become negative.
All of the following are possible sources of bias in using the Consumer Price Index to measure inflation except
A) an increase in the cost of living B) commodity substitution. C) an improvement in the quality of goods. D) the introduction of new goods. E) Both C and D are exceptions.
When the price of computer printers decreased from $100 to $85, the number of computer printers produced fell from 1,000 per week to 850 per week. Using this information, we know the supply of computer printers is
A) elastic. B) inelastic. C) unit elastic. D) perfectly inelastic.