Question

1. Suppose you are studying for the final exam. You have only one last hour to study either accounting, economics, or statistics. The marginal point per hour are 5, 3, and 4, respectively. Which subject should you study? (Assuming that you would pass all classes regardless of what you choose to study.)

Accounting.

Economics.

Statistics.

It does not matter. You would study either one of them.

2.

Unit of Apples	MU of Apple	Unit of Oranges	MU of Oranges
1st	4	1st	9
2nd	3	2nd	3
3rd	1	3rd	2
4th	0	4th	0

Suppose the price of an apple is $2 and the price of an orange is $3. With your budget $10, how many apples and oranges would you buy?

3 apples and 1 orange.
		3 oranges and no apple.
		2 apples and 2 oranges.
		3 oranges and 1 apple.

3.

Unit of Apples MU of Apple Unit of Oranges MU of Oranges 1st 4 1st 9 2nd 3 2nd 3 3rd 1 3rd 2 4th 0 4th 0 Suppose the price of an apple is $2, and the price of an orange if $3. You have a budget $10 for these two items. What would you put in your basket first? An orange. An apple You are indifferent between putting an apple or an orange in your basket. We do not have enough information to answer this question. 4. Consumer equilibrium occurs when: 1. the entire budget is spent; 2. marginal utility from each good should be equal; 3. marginal utility per dollar from each good should be equal. Only 3 is correct. Only 1 and 2 are correct. Only 1 and 3 are correct. 1, 2, and 3 are all correct.

Answer 1