For dessert, Mac has the choice between cheesecake and apple pie. The cheesecake has a marginal utility of 50 and a price of $5, and the apple pie has a marginal utility of 30 and a price of $3 . Therefore, Mac should buy
a. the cheesecake since the marginal utility is greater
b. the apple pie because its price is lower
c. two servings of apple pie and no cheesecake
d. four servings of cheesecake
e. either the apple pie or the cheesecake, it makes no difference
E
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A firm's basic goal is best described as
A) maximizing total revenue. B) maximizing sales. C) maximizing profit. D) minimizing total cost.
To correct for positive externalities the government
A) should allow the price system to do the correction. B) can impose a tax. C) can give a subsidy. D) should create a public good.
The increase of sub-prime (including Alt-A) loans as a share of the total from 2001-2005 was an important contributing factor to the economic crisis of 2008 because
a. these loans initially reduced the demand for housing. b. these loans initially reduced housing prices. c. the default and foreclosure rates on these loans are several times higher than conventional loans to prime borrowers. d. the default and foreclosure rates on these loans are considerably lower than conventional loans to prime borrowers.
What are the basic differences between public choice theory and the economics of taxation?
Please provide the best answer for the statement.