Lisa is buying bread and at her current purchases, the marginal utility (in dollars) is less than price. If she wants to optimize, she should
A. reduce bread consumption, thus raising P to the level at which MU = P.
B. reduce bread consumption, thus raising MU to the level at which MU = P.
C. increase bread consumption, thus raising P to the level at which MU = P.
D. increase bread consumption, thus lowering MU to the level at which MU = P.
Answer: B
You might also like to view...
Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?
a. ACG b. BCFE c. ABE d. EFG
________ highlights the importance of fiscal policy as a determinant of good macroeconomic performance
A) The real business cycle model B) The traditional Keynesian model C) The new Keynesian model D) Rational expectations
Which one of the following is not an example of an externality
a. Carbon dioxide emissions from a motor vehicles d. Increased costs of mining iron ore drive up the price of steel b. Acid rain damages wildlife habitat in a region downwind from a factory e. Over-fishing results in the depletion of the food supply of an endangered marine mammal c. A driver enjoys beautiful scenery while driving through a National Forest
In the long run, if the production of all goods increases for a society (there is economic growth), it will cause the production possibility frontier to
A. shift inward. B. stay the same. C. shift outward. D. first shift inward and then shift outward.