The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this
distinction. Poornima spends all of her money on paperback novels and mandarins. In 2012, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a mandarin was $3.00.
Which of the following give the nominal value of a variable? Check all that apply.
-The price of a beignet is $3.00 in 2012.
-Maria's wage is $27.00 per hour in 2012.
-The price of a beignet is 0.33 paperback novels in 2012.
Which of the following give the nominal value of a variable? Check all that apply.
-The price of a beignet is $3.00 in 2012.
-Maria's wage is $27.00 per hour in 2012.
-The price of a beignet is 0.33 paperback novels in 2012.
1 answer:
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Answer:
Option (E) is correct.
Explanation:
For utility maximization,
Bob's consumption of Housing and food should be such that:
Here,
= 50
=20
Bob is not maximizing utility, as these two terms are not equal(50 > 20).
Since the marginal utility per rupee spent on housing is greater than that on food.
Hence, Bob can increase his utility just by consuming more of housing and less of food.