You're maximizing utility when:
A. (MU of X)/(P of X) = (MU of Y)/(P of Y).
B. (MU of X)/ (P of X) > (MU of Y)/ (P of Y).
C. (MU of X)/(P of Y) = (MU of Y)/(P of X).
D. (MU of X)/(P of X) < (MU of Y)/(P of Y).
Answer: A
You might also like to view...
When an economy is in a liquidity trap
A) monetary policy cannot be used to influence the exchange rate. B) monetary policy can be used to drive interest rates down, but not to drive them up. C) there is an excess demand for bonds. D) people and institutions avoid holding cash balances. E) it can escape only by introducing a hard, or illiquid, currency.
Because local banks earn fees for each loan, their role to:
A. properly assess the risk of each borrower is misaligned with their incentive. B. create not many mortgages perfectly aligns with their incentives. C. provide mortgage loans only to those with low credit scores is misaligned with their incentive. D. properly assess the risk of each borrower is perfectly aligned with their incentive.
If a person could increase total utility by purchasing more candy and fewer apples, then the
a. total utility from candy must exceed the total utility from apples b. marginal utility of candy must exceed the marginal utility of apples c. marginal utility per dollar spent on candy must exceed the marginal utility per dollar spent on apples d. total utility per dollar spent on candy must exceed the total utility per dollar spent on apples e. marginal utility per dollar spent on candy must be less than the marginal utility per dollar spent on apples
Refer to the figure below, which shows marginal benefits (MB) and marginal cost (MC) of activity A:
If the decision maker is choosing 400 units of activity A,
A. the activity could be increased by one unit and net benefits will increase by $15. B. this level maximizes net benefits. C. the activity could be reduced by one unit and net benefits will rise by $25. D. the activity could be reduced by one unit and net benefits will increase by $10. E. the activity could be reduced by one unit and net benefits would decrease by $10.