A condition for consumer utility maximization is
Equality of the ratio of marginal utilities and the ratio of prices
Equality of the ratio of average utilities and the ratio of prices
Equality of the marginal utility to total utility ratio for both commodities
Total utility and marginal utility must be zero
Correct answer is A
In Utility Maximization, the consumers decide to spend their money so that the amount spent on each product purchased yields the same amount of extra marginal utility. The consumer would maximize its utility when marginal utility equals the price paid for the commodities.
Elastic
Unitary elastic
Perfectly inelastic
Perfectly elastic
Correct answer is A
The law of supply states that there is a direct relationship between the quantity supplied and the price of a commodity. If a change in price causes a change in the quantity supplied, this means the supply is elastic.
A shift in the demand curve indicates
Exceptional demand
Change in demand
Change in quantity demanded
Elasticity of demand
Correct answer is B
A shift in the demand curve means that other determinants of demand other than price causes demand to change. They include changes in tastes, population, income, prices of substitute or complementary goods, and expectations about future conditions and prices. This is usually an indication of a change in demand.
A change in demand describes a shift in consumer desire to purchase a particular good or service, irrespective of the price difference.
Visible balance is also known as
Terms of trade
Balance of payments
Balance of trade
Capital balance
Correct answer is C
The visible trade balance is that part of the balance of trade figures that refers to international trade in physical goods, but not trade in services. It is also known as balance of payment in the current account balance.
Where to produce
For whom to produce
How to produce
What to produce
Correct answer is C
The problem of how to produce refers to selection of techniques to be used for production of goods and services. By technique we mean labour or capital intensive techniques. That is knowing the input combination to be used.