Consumers maximize their total utility subject to a budget constraint if the
a. total utility is increasing and marginal utility decreasing
b. dollar amount (value) spent on each good is the same
c. total utility gained from each good is equal
d. marginal utility of the last dollar spent on each good is equal
e. total utility equals the total budget constraint
D
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If fiscal stimulus creates a large budget ________, then in the long run economic growth ________
A) deficit; decreases B) surplus; increases C) deficit; increases D) surplus; decreases E) None of the above answers is correct. The figure above shows a nation's aggregate demand curve, aggregate supply curve, and potential GDP.
If the capital stock increases faster than employment, then we would expect
a. both output and labor productivity to rise b. output to rise but labor productivity to fall c. both output and labor productivity to fall d. output to fall but labor productivity to rise e. output to rise but labor productivity to remain unchanged