Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocolate bar is 18 units of utility and the marginal utility from the fourth bag of almonds is also 18. Is Adhira maximizing her
utility?
A) Yes, the marginal utility from the last unit of each good is equal.
B) No, she must buy 1 more chocolate bar to equate her quantities of the two goods.
C) No, she must cut back to 3 bags of almonds to equate her quantities of the two goods.
D) No, without information on her income and the prices of the two goods, we cannot answer the question.
Answer: D
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What will be an ideal response?
If AE < Y, which of the following will NOT occur?
A) inventories will decline B) actual investment will be more than planned investment C) employment will decline D) GDP will decline