Basil is maximizing his utility from consuming tea and crumpets. If the marginal utility of his last cup of tea was 24 units of utility and that of his last crumpet was 6 units of utility, which of the following is true?
a. The price of tea is six times the price of crumpets.
b. The price of crumpets is four times the price of tea.
c. The prices of tea and crumpets are equal.
d. The price of tea is four times the price of crumpets.
e. The MU of the next cup of tea is less than the MU of the next crumpet.
D
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If food is measured on the horizontal axis of budget line diagram, and clothing is measured on the vertical axis, an increase in
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a. The quantity of real loanable funds per time period falls, and real GDP falls. b. The quantity of real loanable funds per time period falls, and real GDP rises. c. The quantity of real loanable funds per time period rises, and real GDP remains the same. d. The quantity of real loanable funds per time period and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Monoploy
What will be an ideal response?