The price of one piece of pizza is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 pieces of pizza and receiving 20 utils for the last piece. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods
A. is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.
B. is not an optimum because the marginal utility per dollar spent is greater for pizza than for movies.
C. is an optimum since the entire income is spent and total utility is minimized.
D. is not an optimum because the consumer has not spent all of his money.
Answer: A
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A study of the impact of various government policies on economic growth would be considered:
A. marginal economics. B. microeconomics. C. government economics. D. macroeconomics.
If the interest rate increases, then the:
a. economy will move to a new point along the existing consumption function. b. consumption function will shift upward. c. investment demand curve will shift downward. d. investment demand curve will shift upward. e. economy will move to a new point along the existing investment demand curve.
If all large firms in the economy were broken into smaller firms, the result might be
a. decreased manufacturing efficiency in some industries. b. increased prices for some manufactured goods. c. decreased investment in research and development in some industries. d. All of the above are correct.
Keynes explained that recessions and depressions occur because of
a. excess aggregate demand. b. inadequate aggregate demand. c. excess aggregate supply. d. inadequate aggregate supply.