Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4
A) marginal utility from cola to the marginal utility from comics
B) marginal utility from comics to the marginal utility from cola
C) number of comics Tom buys to the number of cola Tom buys
D) total utility from comics to the total utility from cola
B
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The difference between the actual price that a producer receives and the minimum acceptable price the producer is willing to accept is called the producer
A. costs. B. revenues. C. utility. D. surplus.
If the central bank can act as a lender of last resort during a banking panic, banks can
A) call in their loans to their customers and eventually restore the public's faith in the banking system. B) satisfy customer withdrawal needs and eventually restore the public's faith in the banking system. C) borrow more and more money from the central bank, and this will lower its reserves and decrease the public's faith in the banking system. D) encourage the public to borrow directly from the central bank, and this will worsen the banking panic.
Which measure of inflation best reflects underlying trends in the economy?
A. Core inflation B. Headline inflation C. Overall inflation D. Nominal inflation
Higher education subsidies in the form of the federal government's student loan program have the potential to
a. reduce the number of people who attend college. b. reduce the number of universities and colleges in the future. c. create a credit bubble and debt crisis. d. reduce the default risk on student loans.