The theory of consumer behavior assumes that consumers attempt to maximize:
A. the difference between total and marginal utility.
B. total utility.
C. average utility.
D. marginal utility.
Answer: B
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Using the above table, what is the opportunity cost of moving from alternative C to alternative B?
A) 1/2 a pizza pie B) 60 pizza pies C) 90 pizza pies D) 30 pizza pies
When the price of gasoline is $2.20 per gallon, 11 million gallons are demanded, and when the price of gasoline goes up to $2.60 per gallon, 10 million gallons are demanded. The gasoline in this range has a(n)
A) elastic demand. B) inelastic demand. C) unit elastic demand. D) perfectly elastic demand.
Suppose the real interest rate in the economy is 3% and the nominal interest rate is 6%, what is the current inflation rate?
a. 18% b. 9% c. 2% d. 3% e. 2.5%
As long as price is greater than average variable cost, a firm maximizes its profit by producing that quantity of output for which
a. average revenue equals average total cost b. the price is the highest c. marginal revenue equals marginal cost d. average total cost is minimized e. average variable cost is minimized