Your marginal utility of a third waffle is 10 and your marginal utility of a second piece of ham is 30 . If you eat the third waffle, which of the following must be true?
a. You are irrational.
b. You prefer waffles.
c. The price of a waffle is less than one third the price of a piece of ham.
d. The price of a waffle is more than the price of a piece of ham.
e. The price of a waffle is three times the price of a piece of ham.
C
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Suppose the economy is initially operating at point A in the above figure. Which of the following statements is TRUE?
A) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the short run. B) An unexpected reduction in aggregate demand will cause the economy to move from point A to point C in the short run. C) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the long run. D) none of the above
Based on the table above, the cost of the base period market basket in 2013 is
A) $3,300. B) $4,885. C) $4,650. D) $3,885. E) None of the above answers is correct.
One baseline assumption that economists make about consumer behavior is that:
A. people are rational utility maximizers. B. people will always choose short-term benefits to longer-term payoffs. C. people will always choose what makes them happiest. D. people are unpredictable.
Aggregate demand can be defined as:
a. the total spending by all consumers, business firms, government agencies, and foreigners in the United States. b. the total amounts that all consumers, business firms, government agencies, and foreigners wish to spend on all final goods and services at various price levels. c. the total spending by consumers, business firms, and government agencies in one year. d. the total spending by consumers, business firms, and government agencies on final goods and services.