There are only two people in the world (Adam and Eve) and only one good (apples). Adam has four apples and a total utility in money terms from apple consumption of $16; Eve has four apples and a total utility from apple consumption of $20 . Which of the following statements must be true?
a. Eve's marginal utility from consuming her fourth apple must be greater than Adam's marginal utility from consuming his fourth apple.
b. The total utility of society will rise if Adam gives Eve one apple.
c. If Adam and Eve each always has a positive marginal utility from consuming apples, the total utility of society can only be increased by an increase in the total number of apples available for consumption.
d. Adam's average utility from consuming apples is greater than Eve's average utility from consuming apples.
c
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Which of the following describes a difference between the marginal product of labor and the marginal revenue product of labor?
A) The marginal product of labor declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product of labor declines as each additional worker is hired because of diseconomies of scale. B) The marginal product of labor is inelastic. The marginal revenue product of labor is elastic. C) The marginal product of labor declines as each additional worker is hired because of the law of diminishing returns. The marginal revenue product increases as each additional worker is hired because of increases in the productivity of labor. D) The marginal product of labor measures the change in output as additional workers are hired. The marginal revenue product measures the change in revenue as additional workers are hired.
If a tax system is made more progressive, the pre-tax wages of upper-income individuals will tend to rise
a. True b. False
In which of the following situations, is a barrier to entry into a monopoly least likely to exist?
a. A large firm enjoys economies of scale. b. The tariffs on foreign goods are eliminated by the government. c. A company is the sole inventor of what it produces and no one else can make a good substitute. d. Government restrictions such as license requirements are enacted. e. A company is the only owner of an essential resource needed to produce its product.
If demand increases while supply simultaneously decreases, then the equilibrium quantity
A) always increases. B) always decreases. C) can never change. D) none of the above