In making decisions about what to consume, a person's goal is to
A) allocate her limited income among all the products she wishes to buy so that she receives the highest total utility.
B) maximize her marginal utility from the goods and services she wishes to buy using her limited income.
C) buy low-priced goods rather than high-priced goods.
D) consume as many necessities as possible and then, if there is money left over, to buy luxuries.
A
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As the number of substitutes for a good increases, its own-price elasticity becomes more
a. Unitary b. Relatively elastic c. relatively inelastic. d. perfectly inelastic.
The Sherman Antitrust Act was passed in:
a. 1890. b. 1914. c. 1929. d. 1933.
Suppose that we are currently at point b in Figure 14.1. An increase in the price level will result in a:
A. shift in the AD curve from AD1 to AD2. B. shift in the AD curve from AD1 to AD0. C. movement from point b to point a. D. movement from point b to point c.
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $6.00; AVC = $4.00; MC = $3.50; MR = $3.50. The firm should
A. increase output. B. remain at the same position. C. increase price. D. shut down.