Sharon purchases two products with a given fixed budget, orange juice and soda. Her marginal utility from orange juice is 60 and her marginal utility from soda is 30. The price of a bottle of orange juice is $2.00 and the price of soda is $1.00. These data suggest that:
A. Sharon is maximizing her utility from the given fixed budget
B. Sharon should buy more orange juice and less soda
C. Sharon should buy more soda and less orange juice
D. Sharon should buy less orange juice and soda
A. Sharon is maximizing her utility from the given fixed budget
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When some forms of money start to pay interest, then along with a rise in real output it takes a ________ rise in the market interest rate than before to hold the demand for money equal to its supply, which is to say that the LM curve has become
________. A) larger, steeper B) larger, flatter C) smaller, steeper D) smaller, flatter
Which of the following will cause a movement along the demand curve instead of a shift of the demand curve?
A) income B) tastes and preferences C) Expectations e the future price of a good D) none of the above
The total cost curve for a firm can be derived from isoquants and isocost lines by
A. varying production technologies, but keeping input prices and expenditure levels constant. B. varying total expenditures while keeping input prices and production technology constant. C. varying the price of either capital or labor while keeping total expenditures and production technology constant. D. varying the prices of capital and labor and keeping total expenditure constant.
In the long run, perfectly competitive firms achieve:
A) allocative and productive efficiency. B) allocative efficiency, but not productive efficiency. C) productive efficiency, but not allocative efficiency. D) neither allocative nor productive efficiency