At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts. She spends $5 a day at the shop on 3 doughnuts and 2 cups of coffee. Is Hannah maximizing her total utility?
A) No.
B) Maybe, but I need to know more about Hannah's income.
C) Yes.
D) Maybe, but I need to know more about Hannah's marginal utility per dollar for each of the two goods.
D
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__________ bidders in a Treasury auction are guaranteed their bids at the __________ price resulting from the auction
A) Competitive; market-clearing B) Noncompetitive; highest C) Competitive; lowest D) Noncompetitive; market-clearing
The increase in the quantity of labor supplied in response to a higher wage is called the:
A. price effect. B. labor effect. C. income effect. D. substitution effect.
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 1,000 units is $2.50. The minimum possible average variable cost is $2. The market price of the product is $2.50. To maximize profits, the firm should
A. increase production to more than 1,000 units. B. decrease production to less than 1,000 units. C. continue producing 1,000 units. D. shut down.
When a business firm makes an investment in physical capital, that investment is subject to _____.
a. state and local government incentives b. economic output and productivity c. political orientated incentives d. the discipline of the market