Let MU_a and MU_b Stand for the Marginal Utilities of Apples

question 203

Multiple Choice

Let MU_a and MU_b stand for the marginal utilities of apples and bagels. Let P_a and P_b stand for their prices. The general necessary condition for consumer equilibrium is

• A) MU_a = MU_b.
• B) MU_a = MU_b and P_a = P_b.
• C) MU_a/P_a = MU_b/P_b.
• D) MU_a/MU_b = P_b/P_a.

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Definitions:

Common Stock

Equity securities that represent ownership in a company, providing voting rights and a share in the company’s profits through dividends.

Preferred Stock

A type of stock that typically guarantees dividends and has priority over common stock in asset liquidation.

Dividends

Payments made by a corporation to its shareholder members. It is the share of profits and retained earnings that the company distributes to its shareholders.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate.