Carolyn spends her income on popular magazines and music CDs. If the price of a CD is four times the price of a magazine and if Carolyn is maximizing her utility, she buys
A) four times as many CDs as magazines.
B) both goods until the marginal utility of the last magazine purchased is four times the marginal utility of the last CD purchased.
C) both goods until the marginal utility of the last CD purchased is four times the marginal utility of the last magazine purchased.
D) four times as many magazines as CDs.
C
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A successful local entrepreneur opens up the only Chevrolet dealership in a medium sized Texas town. Why does this not necessarily constitute a monopoly position?
What will be an ideal response?
A permanent shift in the foreign exchange market supply and demand curves such that the fixed exchange rate is no longer an equilibrium rate is referred to as:
a. permanent devaluation. b. speculative disequilibrium. c. permanent revaluation. d. speculative equilibrium. e. fundamental disequilibrium.