Which of the following acts as an “umpire” in a market system?

Jane spends her monthly dining-out budget of $300.00 on either steak or lobster dinners. Using the above figure, what is the opportunity cost of a lobster dinner in terms of steak dinners?

A) 0.5 steak dinners per lobster dinner B) 2.0 steak dinners per lobster dinner C) 5.0 steak dinners per lobster dinner D) 10.0 steak dinners per lobster dinner

Suppose an investor equally allocates their wealth between a risk-free asset and a risky asset. If the MRS of the current allocation is less than the slope of the budget line, then the investor should:

A) shift more of their wealth to the risky asset. B) shift more of their wealth to the risk-free asset. C) keep the same asset allocation. D) We do not have enough information to answer this question.