Samantha is maximizing total utility while consuming food and clothing. Her marginal utility from food is 50, and her marginal utility from clothing is 25 . If clothing is priced at $10 per unit, the price of food per unit must be
a. $2.
b. $2.50.
c. $5.
d. $20.
d
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Farmers cannot individually affect market price because
A. There is an infinite demand for their goods. B. Demand is perfectly inelastic for the farmer's produce. C. The government exercises control over the market power of competitive firms. D. Their individual production is insignificant relative to the production of the market.
Stock market bubbles are
A. created when investors pay too much attention to the fundamental determinants. B. created when investors stray from the fundamental determinant of interest rates and give too much attention to corporate earnings. C. created when investors stray from the fundamental determinant of corporate earnings and give too much attention to interest rates. D. created when investors stray from the fundamental determinants of corporate earnings and interest rates and give too much attention to what the stock will be worth next year.
In the figure, the equilibrium price is initially $3 per bushel of wheat. If buyers come to expect that the price of a bushel of wheat will rise in the future, but sellers do not, the current equilibrium price will
A) rise. B) not change. C) fall. D) Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market.
At a quantity above the equilibrium quantity, which of the following does not exist? a. deadweight loss b. underproduction
c. overproduction d. inefficient production