An individual consumes only hamburgers and milkshakes. The last hamburger consumed yields 25 utils of satisfaction, while the last milkshake consumed yields 10 utils of satisfaction. If the price of a hamburger is $2.50 and the price of a milkshake is $1.50, we can conclude that:
a. the consumer should consume more hamburgers and fewer milkshakes.
b. the consumer should consume more milkshakes
and fewer hamburgers.
c. the consumer has achieved consumer equilibrium.
d. the consumer should buy only milkshakes.
a
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A longrun model of trade basic to the determination of how mobile factors of production affect national welfare and the returns to the factors is known as:
a. the specificfactors model. b. the Riparian model. c. the Chicago model of trade. d. the HeckscherOhlin model.
If the crowding-out effect is complete and the marginal propensity to save is 0.2, then an increase in government spending of $500 billion will generate how much more real Gross Domestic Product (GDP)?
A. $0 B. $500 billion C. $50 billion D. $400 billion
Which of the following correctly identifies the difference between the demand for labor and the demand for final goods?
A) The demand for labor is fixed over time, whereas the demand for final goods changes according to changes in tastes and preferences. B) The demand for final goods is fixed over time, whereas the demand for labor changes according to the changes in tastes and preferences. C) The demand for final goods is derived from the demand for labor, whereas the demand for labor is independent of the demand for final goods. D) The demand for labor is derived from the demand for final goods, whereas the demand for final goods is independent of the demand for labor.
________ occurs when an individual has no incentive in paying for a good because failure to pay does not prevent consumption
A) A free-rider problem B) The paradox of thrift C) A tragedy of the commons D) The paradox of plenty