When a consumer is maximizing total utility,
A) the average utility from each dollar spent is the same.
B) total utility cannot be increased by reallocating expenditures among various products.
C) the total utility obtainable from each product is at a maximum.
D) the marginal utility of the last unit of each product purchased is zero.
Ans: B) total utility cannot be increased by reallocating expenditures among various products.
You might also like to view...
Pure monopoly is not studied because of its descriptive realism, but because it is a stepping stone toward more realistic models.
Answer the following statement true (T) or false (F)
The big labels in the music industry, such as Sony, Time-Warner, and Universal, are churning out thousands of CD albums each year that compete against each other for your dollar. But, considering the CD industry only, they also compete against
a. records b. cassette tapes c. used CDs d. stereos e. used textbooks
If one were to consider a university as a business, the computers in the computer labs would be regarded by economists as
a. technology flows. b. mechanization flows. c. part of the university's stock of capital. d. a flow of services from the university's stock of capital.
The Fed uses policy targets of interest rate and/or money supply because
A. The inflation rate is controlled by Congress and the White House B. The target for the GDP growth rate is set by Congress C. It can affect the interest rate and the money supply directly and these in turn can affect unemployment, GDP growth, and the price level