Oscar makes purchases of an existing product (X) such that the marginal utility of the last unit he consumes is 10 utils and the price is $5. He also tries a new product (Y) and the marginal utility of the last unit he consumes is 8 utils and the price is $1. The equal marginal principle suggests that Oscar should
A. increase his consumption of product Y and decrease his consumption of product X.
B. increase his consumption of product X and increase his consumption of product Y.
C. decrease his consumption of product Y and decrease his consumption of product X.
D. increase his consumption of product X and decrease his consumption of product Y.
Answer: A
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Paul is looking for a used washing machine. He has posted his requirement in an exchange Web site and has also mentioned the maximum amount that he is willing to pay for it
If his willingness to pay is lower than the price of good-quality used washing machines, what is likely to happen?
The exchange rate system agreed to in 1944, in which the U.S. government agreed to buy or sell gold at a fixed price of $35 per ounce, is referred to as
A) the Bretton Woods System. B) the gold standard. C) a flexible exchange rate system. D) a floating currency standard.