A market economy answers the question "how" will goods be produced by focusing on
a. dollar votes
b. consumer sovereignty.
c. least-cost method of production.
d. who can afford these goods.
c
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Lilly Davis has $5 per week to spend on any combination of ice cream and candy. The price of an ice cream cone is $2 and the price of a candy bar is $1. The table below shows Lilly's utility values
Use the table to answer the questions that follow the table. Quantity of Ice Cream Cones Total Utility Marginal Utility Marginal Utility per Dollar Quantity of Candy Total Utility Marginal Utility 1 20 1 20 2 38 2 38 3 52 3 48 4 62 4 54 a. Complete the table by filling in the blank spaces. b. Suppose Lilly purchases 2 ice cream cones and 1 candy bar. Is she consuming the optimal consumption bundle? If so, explain why. If not, what combination should she buy and why?
If we consider the equation PAE = A + bY the independent part of the equation that depends on income is:
A. b B. Y C. A D. PAE