Mr. Samuelson's current rates of purchase are such that the marginal utility of slacks is 18 and the marginal utility of ties for him is 5. If slacks and ties are priced at $12 and $2 respectively, it can be concluded that Mr. Samuelson:
A. Is spending too much on slacks and not enough on ties
B. Is spending too much on ties and not enough on slacks
C. Is spending his income in such a way as to maximize his satisfaction
D. Should buy six times as many ties as he does slacks
A. Is spending too much on slacks and not enough on ties
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A good or service with a positive externality is one which ______
A. everyone wants to have access to B. is produced in the social interest C. the marginal social benefit exceeds the marginal private benefit D. the marginal external benefit exceeds the marginal private benefit
The slope of an isoquant tells us
A) how much output increases when both inputs are increased. B) the increase in MPL when capital increases. C) the decrease in capital necessary to keep output constant when labor increases by one unit. D) the decrease in capital necessary to keep MPL constant when labor increases by one unit.