Marginal utility is
A) the utility received by the last consumer of a good.
B) the total utility received from consuming a given quantity of a good divided by the number of units consumed.
C) the change in total utility from consuming an additional unit of a good.
D) the utility received from consuming the first unit of a good.
Answer: C
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Refer to Figure 13-3. The marginal revenue from one additional unit sold is the sum of the gain in revenue from selling the additional unit and the loss in revenue from having to charge a lower price to sell the additional unit
Based on the diagram in the figure A) X represents the gain (price effect) and Y the loss (output effect). B) Y represents the gain (output effect) and X the loss (price effect). C) X + Z represents the loss (output effect) and Y the gain (price effect). D) X represents the loss (price effect) and Y + Z the gain (output effect).
A permanent increase in the real wage rate has a ________ income effect on labor supply than a temporary increase in the real wage, so labor supply is ________ with a permanent wage increase than for a temporary wage increase
A) larger; more B) larger; less C) smaller; more D) smaller; less
During normal times, if the marginal propensity to consumer is 3/4, and the government borrows $10 billion in order to increase spending by that amount, real output will expand by
a. more than $40 billion, because both the additional borrowing and the additional spending will stimulate real output. b. $40 billion, because the net multiplier will be 4. c. less than $40 billion, because the additional borrowing will place upward pressure on real interest rates, weakening the impact of the multiplier. d. $10 billion, because during normal times, the government can borrow funds without any increase in interest rates.
A lighthouse might be considered a private good if
a. there is a second lighthouse nearby, thus preventing a monopoly. b. the owner of the lighthouse is able to exclude beneficiaries from receiving the benefits of the lighthouse. c. ships are able to enjoy the benefits of the lighthouse without paying for the benefit. d. a nearby port authority is able to avoid paying any fees to the lighthouse owner.