The consumer optimum is defined as
A) the set of goods and services that maximizes marginal utility for each good.
B) the set of goods and services such that the marginal utility of each good equals zero.
C) the set of goods and services that maximizes the marginal utility of each good consumed.
D) the set of goods and services, subject to the limited income of the consumer, that maximizes the total utility of the consumer.
Answer: D
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A. shortage, shortage B. surplus, surplus C. shortage, surplus D. surplus, shortage
An organization that converts inputs (like Labor, Capital etc.) into output is called a
A) firm. B) sole proprietorship. C) corporation. D) All of the above.
A rise in the price level that reduces the real wealth of people who hold financial assets is an illustration of the:
a. interest rate effect. b. monetary theory. c. supply-side theory. d. wealth effect. e. trade effect
Which of the following is an explanation for the existence of frictional unemployment?
a. efficiency wages b. minimum-wage laws c. unions d. job search