If a rational consumer is in equilibrium, which of the following conditions will hold true?
A. MU a = MU b = MU c = . . . = MU n .
B. The marginal utility of each good purchased will be zero.
C. The marginal utility of the last dollar spent on each good purchased will be the same.
D. The total utility obtained from each good purchased will be the same.
Answer: C
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In the figure above, Jill is producing at point A. Jill's opportunity cost producing one pair of pants is
A) 2 shirts per pair of pants. B) 3 shirts per pair of pants. C) 3/5 of a shirt per pair of pants. D) 5/3 of a shirt per pair of pants.
Suppose that a professional photographer takes a prize-winning digital photo. She can sell a 5"x7" color print of the photo for $10 . She can also sell the digital file for $20 . There are 500 people willing to buy the color print and 2,000 people willing to buy the digital file. Assume the costs to the photographer are zero and that the people who purchase the digital file cannot resell the file
itself or any prints made from it. What should she do in order to maximize her profits? a. earn $5,000 by selling only the color prints b. earn $40,000 by selling only the digital files c. earn $45,000 by selling both the color prints and the digital files at their respective prices d. We do not have enough information with which to answer this question.
A competitive firm rents capital until the marginal product of capital equals the:
A. real wage. B. real rental price of capital. C. price of output. D. capital/labour ratio.
To remain in consumer optimum
A. a price decrease requires an increase in consumption. B. prices must remain static. C. a price decrease requires a decrease in consumption. D. a price increase requires an increase in consumption.