A consumer is in equilibrium when:
a. his or her marginal utility derived from each good is maximized.
b. each dollar spent on each item provides more and more satisfaction.
c. each dollar spent on each item provides less and less satisfaction.
d. the last dollar spent on each item provides the same additional satisfaction as that dollar would if spent on any other item.
e. his or her average utility for each item is the same.
d
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According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be
A) 1 million gallons of gasoline per month. B) 2 million gallons of gasoline per month. C) 3 million gallons of gasoline per month. D) 4 million gallons of gasoline per month.
When an economy experiences strong economic growth,
a. the number of families in the bottom 10 percent of the income distribution decreases b. the income of families in the bottom of the income distribution increases c. only the top of the income distribution is affected d. the accompanying inflation cancels out any change in income distribution e. the rich are no better off because taxes rise with income