Refer to the information provided in Table 6.2 below to answer the question(s) that follow.
Table 6.2Number ofCandy Bars per DayTotal UtilityMarginal Utility140?275?3100?4115?5?5Number ofHot Dogs per DayTotal UtilityMarginal Utility130?254?372?484?5?6Refer to Table 6.2. If the price of a candy bar is $1, the price of a hot dog is $2, and Aaron has $6 of income, Aaron's utility-maximizing combination of candy bars and hot dogs per day is
A. 1 candy bar and 2 hot dogs.
B. 2 candy bars and 1.5 hot dogs.
C. 4 candy bars and 1 hot dog.
D. indeterminate from this information.
Answer: C
You might also like to view...
Which of the following statements is true about the price elasticity of demand?
A) As the number of substitutes for a product increases, the price elasticity of demand for that good decreases. B) If the budget share of a particular good in a consumer's bundle increases, the price elasticity of demand for that good is likely to decrease. C) The price elasticity of demand for a good is generally higher in the long run than in the short run. D) The demand for a good with a price elasticity of demand of zero is highly responsive to price changes.
Which of the following would NOT be a cause for an increased American demand for the Mexican peso?
A) The United States having lower interest rates than Mexico B) Increased American demand for Mexican goods C) The expectation by speculators that the value of the peso is edging up D) More economic expansion in the United States E) None of the above.
Refer to the above figure. At Point B, the actual unemployment rate
A) will decrease over time. B) is negative. C) tends to be higher than the natural unemployment rate. D) tends to be lower than the natural unemployment rate.
Which principle states that as the production of one good expands, the opportunity cost of producing another unit of this good generally increases?
a. Principle of total cost b. Principle of increasing cost c. Principle of opportunity cost d. Principle of increasing marginal utility