Mr. Samuelson's current rates of purchase are such that the marginal utility of slacks is 18 and the marginal utility of ties for him is 5. If slacks and ties are priced at $12 and $2 respectively, it can be concluded that Mr. Samuelson:
A. Is spending too much on slacks and not enough on ties
B. Is spending too much on ties and not enough on slacks
C. Is spending his income in such a way as to maximize his satisfaction
D. Should buy six times as many ties as he does slacks
A. Is spending too much on slacks and not enough on ties
You might also like to view...
Six possibilities are equally likely and have payoffs of $2, $4, $6, $8, $10, and $12 . The expected value is:
a. $4 b. $5 c. $6 d. $7
If the marginal cost curve shifts upward, a profit-maximizing, nondiscriminating monopolist is likely to respond in the short run by
a. raising price and increasing output b. raising price and decreasing output c. keeping price constant and increasing output d. reducing price and increasing output e. shutting down
In Figure 2.1, a "q/t" for quantity per unit time price would go in
A. Box 1. B. Box 4. C. Box 6. D. Box 2.
The monopolist will choose the price and output combination at which
A) MC equals AR. B) MC equals MR. C) MC equals price. D) MR equals AR.