If the price of marshmallow exceeds the marginal value that the consumer places on marshmallows, then
a. the consumer is at the optimum.
b. the consumer's level of satisfaction would increase if he buys more marshmallows and less of other goods.
c. a surplus of marshmallows exists in the market.
d. the optimum contains fewer marshmallows than the consumer is currently buying.
d. the optimum contains fewer marshmallows than the consumer is currently buying.
You might also like to view...
Which of the following statements is true?
A) Trade leads to inefficient allocation of resources. B) Trade discourages workers to specialize in production. C) International trade creates supply bottlenecks. D) Trade allows people to choose occupations that suit their talents.
Why is price inflation sometimes good in a recession?
A. Price inflation makes it harder for real wages to fall. B. Price inflation makes it harder for real wages to rise. C. Price inflation makes it easier for real wages to rise. D. Price inflation makes it easier for real wages to fall.