Which of the following statements illustrates diminishing marginal utility?
a. An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person.
b. An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person.
c. An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person.
d. An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person.
a
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When an economy is at its natural rate of unemployment, which of the following will be true?
A) Only structural unemployment as a result of technological change will exist in the economy. B) The labor force participation rate will be 100%. C) The unemployment rate will be greater than 0%. D) The unemployment rate will be 0%.
A machine cost $15,000 to install, and has a resale value one year later of $12,000. If the real interest rate is 10%, then the user cost of capital is ________
A) $4,500 B) $1,500 C) $3,000 D) $1,200
False advertising ________ likely to be successful with a plush stuffed toy sold at retail stores because the stuffed toys are a(n) ________ good.
A) is; credence B) is; inspection C) is not; inspection D) is not; credence
Mike wants to open his own repair shop, and is considering using his savings of $30,000 to get it started. He is currently earning 3 percent interest on his savings. His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money. If Mike were to use the money to open his own repair shop, how can he accurately account for his costs?
A. Mike must consider the $900 in forgone interest on his savings as an explicit cost. B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost. C. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost. D. Mike must consider the $900 in forgone interest on his savings as an implicit cost.