Assume that Sofia's marginal utility from pizza consumption is 10 utils and the price is 2.00 per slice. Further, assume that her marginal utility from scone consumption is 20 utils and the price is 3.00 per scone. Which of the following is true?
a. With her existing budget she should increase her consumption of pizza.
b. With her existing budget she should increase her consumption of scones.
c. She is currently maximizing her utility and should not change the amount of consumption for either good with her current budget.
d. If her budget increases, she should increase her consumption of pizza but not scones.
e. If her budget increases, she should increase her consumption of scones but not pizza.
Question 2
A firm under any market structure maximizes profits at a point where:
a. marginal revenue product is greater than marginal factor cost.
b. marginal revenue product is equal to marginal factor cost.
c. marginal revenue product is equal to zero.
d. marginal factor cost is equal to zero.
e. marginal revenue product is less than marginal factor cost.
Relative Energy Consumption per Person for Selected Countries
Real Price of Oil, 1861–2010
Price of Computers, 1982–2010
A Production Function with Diminishing Marginal Product of Capital
Sonal bought a coat for $198.88, which included 8% PST and 5% GST. What was the selling price ...
Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ...