Assume that the marginal utility from good A is 10 units and that the price of good A is $5 per unit. The marginal utility from good B is 15 units and its unit price is $7. In this situation, a utility-maximizing consumer should
A. consume more of good A.
B. consume only good B.
C. consume neither good A nor good B.
D. consume more of good B.
Answer: D
You might also like to view...
A monopolist sells a homogeneous good in several distinct submarkets, and the elasticities of demand differ in these submarkets
If the monopolist selects the rate of output to sell in each submarket by equating marginal revenue and marginal cost, then A) all customers in all markets end up paying the same price. B) it is not price discriminating, but merely price differentiating. C) customers in markets with more elastic demand will pay higher prices than customers in markets with less elastic demand. D) customers in markets with more elastic demand will pay lower prices than customers in markets with less elastic demand.
A dining table costs $3,000 in New York and the same table costs 5,000 euros in Rome. Thus, $1 is equal to:
a. one euro. b. 2 euros. c. 1.67 euros. d. 0.6 euros.
When a person does NOT have to pay the full costs for using a scarce resource, then there is
A) an underproduction of a good. B) a negative externality. C) a positive externality. D) too little economic profit in the activity.
Refer to the information provided in Figure 23.10 below to answer the question(s) that follow.
Figure 23.10Refer to Figure 23.10. Unplanned inventories decrease and output increases when aggregate output is
A. < $1,000 million. B. $1,000 million. C. $1,160 million. D. $1,200 million.