Samara's income is $30 a month and she spends all of it on music downloads and gasoline. The price of a music download is $3 and the price of a gallon of gasoline is $3
At Samara's best affordable point, her marginal rate of substitution is ________ gallon of gasoline per music download. A) 0.5
B) 1
C) 1.5
D) More information is needed to determine the marginal rate of substitution.
B
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According to your textbook, a scientist of any kind
A) works with some assumptions and biases. B) never confront tradeoffs. C) offer only the best evidence to support his or her theory. D) be the best candidate for the Nobel Prize in Economics.
What are liabilities?
A) anything of value owned by a person or a business B) only those unpaid expenses for which a business or person is making interest payments C) the total cost of labor for a firm D) anything a person or a business owes to entities outside the business
"Our marginal revenue is greater than our marginal cost at the current production level." This statement indicates that the firm:
A. is maximizing profits. B. should decrease the quantity produced to increase profits. C. should increase the quantity produced to increase profits. D. None of the statements associated with this question are correct.
The Taste Freeze Ice Cream Company is a perfectly competitive firm producing where MR = MC. The current market price of an ice cream sandwich is $5.00. Taste Freeze sells 200 ice cream sandwiches. Its AVC is $4.00 and its AFC is $3.00. What should Taste Freeze do?
A. Increase production so that AFC will decrease. B. Shut down and produce zero sandwiches because price is less than ATC. C. Decrease production so that AVC will decrease. D. Continue to produce because price exceeds AVC.