If All Consumers in an Economy Have Maximized Their Utility,and

question 8

Multiple Choice

If all consumers in an economy have maximized their utility,and they face a given set of market prices,then each consumer will have identical

• A)total utilities for each good.
• B)consumption of each good.
• C)marginal utilities per unit of each good.
• D)marginal utilities for each good.
• E)ratios of marginal utility to price for each good.

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Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust fully to changes.

Lemonade Stand

A small business venture, often used as an example for basic business principles, where lemonade is sold, typically by younger entrepreneurs.

Fixed Cost

Expenses that do not vary with the level of output or sales, such as rent, salaries, or insurance premiums.

Variable Cost

Expenses that vary in proportion to the volume of goods or services produced in a business.