When a person consumes two goods (A and B), that person's utility is maximized when the budget is allocated such that:
A) the marginal utility of A equals the marginal utility of B.
B) the marginal utility of A times the price of A equals the marginal utility of B times the price of B
C) the ratio of total utility of A to the price of A equals the ratio of the marginal utility of B to the price of A.
D) the ratio of the marginal utility of A to the price of A equals the ratio of the marginal utility of B to the price of B.
Question 2
To protect the cod fishery off the northeast coast of the U.S., the federal government may limit the amount of fish that each boat can catch in the fishery. The result of this public policy is to:
A) shift the cod demand curve to the left.
B) shift the cod demand curve to the right.
C) shift the cod supply curve to the right.
D) shift the cod supply curve to the left.
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