If Callum is consuming his utility maximizing bundle and the price of one good rises, what happens to the marginal utility per dollar spent on this good (MU/P), and what should Callum do?
A) MU/P has increased and Callum should buy more of this good.
B) MU/P has increased and Callum should buy less of this good.
C) MU/P has decreased and Callum should buy more of this good.
D) MU/P has decreased and Callum should buy less of this good.
Answer: D
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The total market value of final goods and services produced in an economy during a one-year period is
A) personal income. B) profit. C) net national product. D) Gross Domestic Product.
With respect to consuming food and shelter, two consumers face the same prices and both claim to be in equilibrium. We therefore know that
A) they both have the same marginal utility for food. B) they both have the same marginal utility for shelter. C) they both have the same MRS of food for shelter. D) All of the above.