Cheese Is Priced at $5 Per Pound and Wine at $10

question 13

Multiple Choice

Cheese is priced at $5 per pound and wine at $10 per bottle.A consumer who enjoys both cheese and wine will not be in consumer equilibrium until the marginal utility of a pound of cheese is:

• A) four times that of wine.
• B) one-fourth that of wine.
• C) two times that of wine.
• D) one-half that of wine.

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Definitions:

Doomsday Machine

A hypothetical construct, often used in discussions of nuclear strategy, that can automatically trigger an annihilating response if a nation is attacked.

Preemptive Nuclear Attack

A nuclear strike launched with the belief that an enemy is about to carry out a nuclear attack.

Credible Threat

A concept in game theory where a threat or strategy is believable and likely to be carried out by a player.

Evolutionary Stable Strategy

A strategy in game theory that, if adopted by a population in a competitive environment, cannot be invaded by any alternative strategy due to its superior success.