Suzy spends all of her income on potato chips and textbooks. To maximize her total utility, she should
a. allocate her income so that the marginal utilities of potato chips and textbooks are equal
b. allocate her income so that the marginal utilities per dollar spent on potato chips and textbooks are equal
c. change her eating habits
d. choose a consumption point that is inside her budget constraint
e. allocate her income so that the total utilities of potato chips and textbooks are equal
B
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If you can produce more of something than others with the same resources, you have
A) a free-market economy. B) an absolute advantage. C) an efficient production system. D) a comparative advantage.
The free rider problem is a situation in which
(a) effluents such as CFCs combine with ozone and decrease concentrations of that protective chemical. (b) one agent secures benefits that others pay for. (c) there are excessive subsidies given to polluting buses or other forms of mass transit. (d) perfect property rights exist.