Colin consumes both corned beef sandwiches and steak sandwiches. Corned beef is priced at 5.00 per sandwich and steak sandwiches are priced at 8.00 . Which of the following marginal utility pairs is consistent with Colin's consumer equilibrium at these prices?
a. MU of corned beef sandwich = 1; MU of steak sandwich = 1
b. MU of corned beef sandwich = 1; MU of steak sandwich = 1.6
c. MU of corned beef sandwich = 1.6; MU of steak sandwich = 1
d. MU of corned beef sandwich = 1; MU of steak sandwich = 5
Question 2
An individual purchasing goods and services will allocate his expenditures so that the pleasure he gets out of spending one more dollar is the same no matter what he spends that dollar on. For a firm purchasing resources, this is the same as ensuring that:
a. the ratio between marginal revenue product and the marginal factor cost is equal for all the resources used.
b. the marginal revenue product of the resources are equal.
c. the marginal factor cost of the resources are equal.
d. the ratio between marginal revenue product and the marginal factor cost is greater than one for all resources.
e. the marginal revenue product is greater than the marginal factor cost of all resources.
