Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys ________
A) the combination that gives him equal total utility from pies and soda
B) 2 pies and 2 cans of soda
C) only sodas because they are less expensive
D) the combination that gives him the same marginal utility per dollar spent on pies as on soda
D
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To maximize profit, a perfectly competitive firm
A) should sell the quantity of output determined by the interaction between industry demand and supply. B) should produce the quantity of output that results in the greatest difference between marginal revenue and marginal cost. C) should sell the quantity of output that results in a value for total revenue that is equal to total cost. D) should produce the quantity of output that results in the greatest difference between total revenue and total cost.
Bank capital is equal to ________ minus ________
A) total assets; total liabilities B) total liabilities; total assets C) total assets; total reserves D) total liabilities; total borrowings