Among all the combinations of goods attainable by a consumer facing a budget constraint, the one that maximizes total utility is the one that
a. maximizes marginal utility per dollar spent on each good
b. maximizes marginal utility per pound, or other physical quantity, of each good
c. equates the marginal utilities per dollar spent on each good
d. equates the marginal utilities per pound, or other physical quantity, of each good
e. drives the marginal utility of each good to zero
C
You might also like to view...
A U.S. citizen buys a newly issued share of stock in England, paying for his order with a check, which the British company deposits in its own U.S. bank account in New York. How is this transaction accounted for in the balance of payments?
A) financial account, U.S. asset export B) current account, U.S. service import C) current account, British good export D) financial account, British asset import E) financial account, U.S. asset import
An inflation forecast developed in a Monetarist framework is likely to focus on
A) Federal Reserve policy. B) interest rate movements. C) household and business spending decisions. D) the velocity of money.
The feature of preferences that "more is better"
a. is a logical consequence of transitivity b. is shared by most people, most of the time. c. implies that 5 apples will always be preferred to 4 oranges d. implies that 5 apples will always be preferred to 5 oranges e. means that, when dining, people always try to eat as much as they possibly can
In the event that the business fails, sole proprietors
a. retain the assets of the business and write off its liabilities b. lose only those assets associated with the business c. pass the losses on to the shareholders d. face unlimited personal liability e. only lose the value of his/her stock