The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products

When promoting average cost pricing, regulators

A) include what they consider to be a normal rate of return on investment. B) encourage firms to produce at the output level where price equals marginal cost. C) fail to consider a return to investors, so regulated firms often have a hard time raising investment funds. D) inflate costs so much that price ends up as large as would prevail under unregulated monopoly.

If the prices of X and Y are $2 and $4 per unit, respectively, and this consumer has $10 in income to spend, to maximize total utility, this consumer should buy:

A. 1 unit of X and 1 unit of Y.
B. 2 units of X and 2 units of Y.
C. 1 unit of X and 2 units of Y.
D. 5 units of X and no units of Y.