If a consumer is maximizing his/her utility for a given income, the:
A. marginal utility for every good purchased would be the same.
B. marginal utility per dollar spent for all goods would be the same.
C. marginal utility per dollar for all goods would be at a maximum.
D. total expenditure on each good would be the same.
Answer: B
You might also like to view...
Using the economic way of thinking, what do a pencil, stick of gum, and balloon have in common?
A) Each is produced by a single person. B) Each is produced by a small number of people. C) Given the state of modern technology and high-speed processing, each can soon be produced without any human intervention at all. D) The production of any one of the goods mentioned above requires the voluntary cooperation of millions of producers and traders.
If income increases by $100 and saving increases by $25, the slope of the consumption function equals _____
a. 1/4 b. 1/5 c. 1/2 d. 3/4 e. 3/5
In the long run, if new fringe firms with same cost structures as existing fringe firms enter the oligopoly market:
a. the dominant firm's ability to extract profit from the market decreases. b. the fringe's ability to extract profit from the market decreases. c. the fringe supply curve rotates leftward and downward. d. the dominant firm's residual demand curve rotates rightward.
Total physical product is maximized if marginal physical product is zero
a. True b. False Indicate whether the statement is true or false