If a consumer is spending all of his/her income in a manner where MUa / Pa = MUb / Pb, then the consumer:
a. should increase the consumption of A and decrease the consumption of B.
b. is maximizing his/her utility.
c. should increase the consumption of B and decrease the consumption of A.
d. should increase the consumption of both A and B.
e. should decrease the purchases of both A and B.
b
You might also like to view...
"Because the price of a diamond is much greater than the price of a gallon of water, the consumer surplus from diamonds is greater than the consumer surplus from water." Is the previous analysis CORRECT? Explain your answer
What will be an ideal response?
All of the following are examples of electronic funds EXCEPT
A) credit cards. B) debit cards. C) stored value cards. D) e-cash.
____________ the airlines, trucking, and long-distance phone calling has led to lower prices for consumers.
A. Regulation of B. Trusts in C. Deregulation of D. Conglomerates in
The cartel model of oligopoly assumes that:
A. monopolists sometimes act like oligopolists when they pit divisions of the same corporation against one other. B. oligopolies act as if they are monopolists by setting prices competitively for each member. C. oligopolies act as if they are monopolists by assigning output quotas to each member so that joint profits are maximized. D. oligopolies act as if they are perfectly competitive when there are no barriers to entry.