Author Question: The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. ... (Read 72 times)

tuffie · **on:** Jun 29, 2018

The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. Initially, a slice of pizza costs 4 and a can of Pepsi 2. Suppose Priscilla has 12 to spend.

If the price of pizza falls to 2, Priscilla will choose to A) consume more pizza.
B) consume more Pepsi.
C) consume less pizza.
D) Both answers A and B are correct.

Question 2

Economic profit sends a signal to entrepreneurs by telling them where

A) price exceeds marginal cost.
B) there are many buyers and many sellers.
C) the shutdown point is.
D) an above normal return on investment can be earned.