Suppose that MUx/Px exceeds MUy/Py. To maximize utility the consumer who is spending all her money income should buy:
A) less of X only if its price rises.
B) more of Y only if its price rises.
C) more of Y and less of X.
D) more of X and less of Y.
Ans: D) more of X and less of Y.
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Assume that a house is rented by four students. When it comes to keeping the house clean, each of the four roommates has an incentive to leave cleaning to the others. As a result, the house is never clean
Which of the following is the best solution to this problem of free riding? A) Assign one roommate the responsibility to keep a watch over the other students B) Require every roommate to contribute to a cleaning service C) Ask every roommate to clean the house if they dirty it D) Require each roommate to pay more toward the house rent and groceries
Refer to Figure 12-1. If the firm is producing 500 units
A) it should maintain its output to maximize profit. B) it is making a profit. C) it is making a loss. D) it should increase its output to maximize profit.