Refer to the information provided in Table 6.3 below to answer the question(s) that follow.
Table 6.3Dozens of Oysters per DayTotal UtilityMarginal Utility160?2104?3134?4152?5?8Number ofBeers per DayTotal UtilityMarginal Utility140?270?394?4114?5?14Refer to Table 6.3. Assume that a store is giving oysters and beers away for free. Consumers can have as many beers and oysters (by the dozen) as they want, but the food has to be consumed one unit at a time. If Tyler has already had one beer and two dozen oysters, then Tyler should
A. consume neither another beer nor another dozen oysters to maximize his utility.
B. be indifferent between consuming the second beer or the third dozen oysters.
C. next consume a beer to maximize his utility.
D. next consume a dozen oysters to maximize his utility.
Answer: B
You might also like to view...
Which of the following will raise consumer expenditures?
A) an increase in interest rates B) an increase in the price level C) a general decline in housing prices D) an increase in expected future income
In official government statistics, the GDP deflator is actually calculated using:
A. a method called a chain-weighted index. B. the ratio of nominal GDP to real GDP from the year before it. C. the value of a market basket that households typically purchase. D. a simpler approach, so the results are easily comparable.
When banks hold excess reserves the:
A. money multiplier underestimates how much money will be created in the economy. B. money multiplier overestimates how much money will be created in the economy. C. reserve ratio is not fully functioning, and should be lowered. D. reserve ratio is not fully functioning, and should be raised.
Suppose the demand function is given by Qxd = 8Px-0.5 Py0.25 M0.12 H. Then the demand for good x is:
A. unitary. B. perfectly elastic. C. inelastic. D. elastic.