Suppose that Gustavo spends all of his income on DVDs and (legally) downloaded songs.At the optimum,which of the following must be TRUE?
A) Gustavo spends all of his income on songs and none on DVDs if songs are cheaper.
B) Gustavo spends all of his income on DVDs and none on songs if DVDs are cheaper.
C) The marginal utility of the last song downloaded equals the marginal utility of the last DVD purchased.
D) The ratio of the marginal utility of the last song downloaded to the price of the song is equal to the ratio of the marginal utility of the last DVD to the price of the DVD.
Correct Answer:
Verified
Q2: Suppose that you buy a lot of
Q3: Assume a convex utility function with an
Q4: Suppose Tyrone spends his entire income on
Q5: Suppose Tim spends his entire income on
Q6: Which of the following is NOT consistent
Q7: Suppose Jon likes to eat both pizza
Q8: Consider three bundles: Bundle A: 1 shirt
Q9: What is the name of the social
Q10: This figure shows a consumer's budget constraint
Q11: _ tools refer to the set of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents