"Water is very inexpensive. Thus the marginal and total utility of water is small." Analyze the previous statements
What will be an ideal response?
Parts of the statement are true but a key part is false. Water is, indeed, very inexpensive and so its marginal utility is small. Because water is so inexpensive, the quantity people buy is large, which is why its marginal utility is small. However, water is essential to life. Hence the total utility of water is immense.
You might also like to view...
When decision rights are decentralized, typically
a. decisions are being moved to those with less of the relevant information b. decisions are being moved from those with stronger incentives to make good decisions c. decisions are being moved from those with more of the relevant information d. decisions are being moved from those with weaker incentives to make good decisions
Stagflation is the combination of
a. falling output and a falling price level b. falling output and rising unemployment c. falling output and a rising price level d. falling output and falling unemployment e. rising unemployment and a falling price level
If the United States has a trade deficit, this means that
A. Trade activity is limited to just a few goods. B. The trade balance is negative. C. Exports exceed imports. D. The U.S. economy produces more than it consumes.
Suppose that the salary range for recent college graduates with a bachelor's degree in economics is $30,000 to $50,000, with 25 percent of jobs offering $30,000 per year, 50 percent offering $40,000 per year and 25 percent offering $50,000 per year and that in all other respects, the jobs are equally satisfying. Assume that in this market, a job offer remains open for only a short time so that continuing to search requires an applicant to reject any current job offer. The expected starting salary for a college graduate with a bachelor's degree in economics is:
A. $50,000. B. $45,000. C. $40,000. D. $30,000.