Author Question: Suppose an individual's MRS (of steak for beer) is 2:1 . That is, at the current consumption choices ... (Read 50 times)

jayhills49 · **on:** Jul 1, 2018

Suppose an individual's MRS (of steak for beer) is 2:1 . That is, at the current consumption choices he or she is willing to give up 2 beers to get an extra steak. Suppose also that the price of a steak is 1 and a beer is 25. Then in order to increase utility the individual should
a. buy more steak and less beer.
b. buy more beer and less steak.
c. continue with current consumption plans.
d. Not enough information to answer the question.

Question 2

In profit centers
a. Managers are easy to evaluate because there is a simple metric of how well they performed
b. Managers typically do not have the information to run their division efficiently
c. Managers' decisions rarely affect other divisions
d. Managers typically do not have the incentives to run their division efficiently