Carolyn spends her income on popular magazines and music CDs. If the price of a CD is four times the price of a magazine and if Carolyn is maximizing her utility, she buys
A) four times as many CDs as magazines.
B) both goods until the marginal utility of the last magazine purchased is four times the marginal utility of the last CD purchased.
C) both goods until the marginal utility of the last CD purchased is four times the marginal utility of the last magazine purchased.
D) four times as many magazines as CDs.
C
You might also like to view...
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
When policy changes are temporary, then:
a. exchange rates do not change. b. expectations do not change. c. interest rates do not change. d. expectations can change based on results.
Platform businesses such as Google and Facebook:
A. are public utilities. B. use data to retain market power. C. do not face competition. D. are highly regulated.
Suppose Darrell has $4,000 in currency which he deposits in his bank. If the reserve ratio is 25 percent, this will lead to a maximum increase of ________ in M1 throughout all banks.
A. $0 B. $4,000 C. $6,000 D. $12,000