Suppose That at Current Consumption Levels an Individual's Marginal Utility

question 17

Multiple Choice

Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2.Then the MRS (of soft drinks for hot dogs) -that is,the number of hot dogs the individual is willing to give up to get one more soft drink is

• A)5
• B)2
• C)1/2
• D)1/5

---

Definitions:

M1

A category of the money supply that includes physical currency and coins, demand deposits, traveler’s checks, and other checkable deposits.

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money.

M3

A measure of the money supply that includes M2 plus large time deposits, institutional money market funds, and short-term repurchase and other larger liquid assets.

Shareholders

Individuals or entities that own shares in a corporation, giving them certain rights such as voting on corporate matters and receiving dividends.