If John Consumes Only Two Goods,A and B,and He Is

question 51

Multiple Choice

If John consumes only two goods,A and B,and he is maximizing his utility subject to his budget constraint,

• A)MUA/MUB equals 1.
• B)MUA/MUB equals the ratio of the price of A to the price of B.
• C)MUA/MUB is at a maximum.
• D)MUA/MUB equals the ratio of the total utility of A to the total utility of B.
• E)MUA/MUB equals zero.

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Definitions:

Social Security

A government program that provides financial assistance to people with inadequate or no income, particularly the elderly, disabled, and survivors.

Medicare

A federal health insurance program in the United States for people aged 65 and older, as well as for some younger individuals with disabilities.

Federal Budget Deficit

The financial shortfall when the federal government's expenditures exceed its revenues in a fiscal year.

Aggregate Supply

The total supply of goods and services available to a particular market from producers at various price levels, in the context of macroeconomic analysis.