When a consumer spends income so that the ratio of marginal utilities (MUs) of all goods purchased equals the ratio of their prices, the consumer is
a. maximizing marginal utility
b. spending too much on all goods
c. maximizing total utility
d. beyond the point of diminishing marginal utility
e. behaving in opposition to the principal of rational behavior
C
You might also like to view...
What leads thousands of profit seeking entrepreneurs to misread the signals of the market-price system?
A) Poor budget policy on behalf of government officials B) The globalization of the world economy C) An artificial lowering of interest rates D) A poor knowledge of the basic principles of supply and demand
If an economy has a velocity of circulation of 3, then
A) the quantity of money is 3 times real GDP. B) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP. C) nominal GDP is 1/3 the size of the quantity of money. D) the quantity of money is $3 for every dollar of GDP.
A cost curve drawn with years on the horizontal axis and costs per unit on the vertical axis would be a(n)
A. analytical cost curve. B. long-run cost curve. C. historical cost curve. D. theoretical cost curve.
Many U.S. producers complain about limited access to the Japanese market. They say that they cannot export to Japan because Japanese import restrictions are so severe. Who gains? Who loses?
a. Everyone loses. b. Japanese producers gain, U.S. producers and Japanese consumers lose. c. Japanese producers and consumers gain, U.S. producers and consumers lose. d. Japanese consumers and U.S. consumers gain, Japanese producers lose e. Everyone gains.