Suppose that Tracy Stuart spends all of her income on two goods, A and B, in a manner in which MUa = 15 and MUb = 80, and the Pa = $5 and the Pb = $20 . Then she
a. is already maximizing her total utility and should make no change
b. should increase her purchases of B and decrease her purchases of A
c. should raise MUa so that the MUa/Pa ratio is higher, giving her reason to buy more of A and less of B
d. should raise MUa so that the MUa/Pa ratio is higher, giving her reason to buy more of B and less of A
e. should increase her purchases of A and decrease her purchases of B
B
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In an attempt to raise sales, Hannah cut prices in her bookstore by 20 percent. If the dollar value of her sales remained constant, that indicates
a. old customers bought no more books. b. no new customers bought books. c. the quantity of books sold increased 20 percent. d. the demand curve is vertical.
A craft union can raise union members' wages by restricting labor supply through high initiation fees, long apprenticeship periods, or difficult qualifying requirements
Indicate whether the statement is true or false