Refer to Table 10-4. For steak and cheese sandwiches and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis
Mabel has $14 to spend on steak and cheese sandwiches and grilled chicken sandwiches. Which of the following statements is true?
A) To maximize her utility, Mabel will need a total of $36, the income needed to buy 6 steak and cheese sandwiches and 6 grilled chicken sandwiches.
B) If Mabel maximizes her utility she will buy three steak and cheese sandwiches and two grilled chicken sandwiches.
C) If Mabel was maximizing her utility when spending $14 and then received an additional $4, she would receive the most marginal utility per dollar if her next purchase was another grilled chicken sandwich.
D) Mabel will first buy two steak and cheese sandwiches; then with her remaining $6 she will buy three grilled chicken sandwiches.
C
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If Table 12.2 represents all the investments available to the economy, the nominal interest rate is 4.5 percent and there is no inflation, what will be the level of investment in the economy?
A) $200 B) $500 C) $600 D) $800
Which of the following is not a reason why the prospects for the further expansion of developing country commodity exports are likely to be limited?
(a) Low income elasticities for these products. (b) Low likelihood of development of further synthetic substitutes. (c) Continued agricultural protection despite trade agreements. (d) Declining terms of trade.