Author Question: In terms of utility theory, equilibrium in the real world means that a. households are consuming as ... (Read 222 times)

Mr. Wonderful

  • Hero Member
  • *****
  • Posts: 866
In terms of utility theory, equilibrium in the real world means that
 a. households are consuming as much of every commodity as they would like
  b. households have spent their incomes in such a way that their overall satisfaction is maximized
  c. households have spent their incomes in such a way that their marginal utility is maximized
  d. households have spent their incomes in such a way that their marginal utility is zero for every product consumed
  e. households have spent their incomes in such a way that their total utility is zero

Question 2

As long as scarcity exists,
 a. product prices play no role in utility maximization
  b. income plays no role in utility maximization
  c. income and product prices must both be considered in utility maximization
  d. consumers maximize utility by consuming all products until their marginal utility is zero
  e. product prices will be zero



alexanderhamilton

  • Sr. Member
  • ****
  • Posts: 334
Answer to Question 1

B

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

For a complete list of videos, visit our video library