Juanita is spending her entire income on goods X and Y. Her marginal utility from the last unit of X is 50 and the marginal utility from the last unit of Y that she consumes is 100. Juanita's utility is only maximized if
A. the price of good X is twice that of good Y.
B. the price of good Y is twice that of good X.
C. the prices of X and Y are the same.
D. We cannot determine whether Juanita is maximizing her utility.
Answer: B
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A) inverse; unit cost; cumulative output B) direct; unit cost; cumulative output C) inverse; education; annual income D) direct; education; annual income E) direct; education; labor productivity
If the government provides universal health insurance, what screening process will the government need?
A) It won't need a screening test. B) It will only give health insurance to non-smokers. C) It won't use screening tests but it will use statistical discrimination. D) It won't use screening tests but it will use signals.
With this utility function, the bundle (3,2) provides the same utility as the bundle:
a. (2, 3). b. (2, 4). c. (2, 5). d. (3, 3).
When good X is produced, some people benefit. A free-rider problem arises when
a. the number of people who benefit is small and it is impossible to prevent anyone from benefiting. b. the number of beneficiaries is small and it is possible to prevent some people from benefiting. c. the number of beneficiaries is large and it is impossible to prevent anyone from benefiting. d. the number of beneficiaries is large and it is possible to prevent some people from benefiting.