Suppose Renee can increase her total utility from consuming video rentals and books by buying one more book and renting one fewer video. Which of the following is true?
A) The marginal utility of video rentals is negative.
B) The marginal utility per dollar spent on books exceeds that of video rentals.
C) The marginal utility of the last book consumed exceeds the marginal utility of the last video rental consumed.
D) The marginal utility of the last video rental consumed exceeds the marginal utility of the last book consumed.
Answer: B
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If the cost of the CPI market basket at current period prices is $1000 and the cost of the CPI market basket at base period prices is $250, the CPI is
A) 2.50. B) 400. C) 250. D) 100. E) 4.0.
Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of:
A. foreign aid. B. capital-saving investment. C. in-kind investment. D. technological advance.