Ricardo Buys Cola and Popcorn

question 102

Multiple Choice

Ricardo buys cola and popcorn. Cola sells for $0.50 a can and popcorn sells for $1 per bag. He is in consumer equilibrium. The price of a cola jumps to $1 per can. In his new consumer equilibrium, Ricardo's

• A) marginal utility of cola will be equal to his marginal utility of popcorn.
• B) marginal utility per dollar spent will be 2.
• C) total utility will be higher.
• D) marginal utility of cola will decrease.

Identify strategies for coping with loneliness and improving relationships.

Understand the role and actions of the Federal Reserve in countering economic fluctuations.

Calculate the impact of changes in government spending and taxation on aggregate demand using the concept of the multiplier.

Analyze the effect of temporary versus permanent tax cuts on aggregate demand.

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