Author Question: Bobby spends 100 per month on pizza and CDs. His utility from these goods is shown in the table ... (Read 103 times)

809779 · **on:** Jun 29, 2018

Bobby spends 100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is 10 and the price of a CD is 20. Bobby currently buys 2 pizzas and 6 CDs.

To maximize his utility in the next period, he should A) buy more pizza and fewer CDs.
B) buy more CDs and fewer pizza.
C) buy more of both goods.
D) stay with the current combination of goods.

Question 2

The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel.

If the market is competitive and unregulated, the equilibrium quantity of steel is ________ tons and the efficient quantity of steel is ________ tons. A) 2; 2
B) 2; 4
C) 4; 2
D) None of the above answers is correct.