Are your total and marginal utility of ice cream schedules determined by the price of ice cream?
What will be an ideal response?
No. Your total and marginal utility are determined purely by how much or how little you like ice cream. If you like it a lot, your marginal utility will be higher than otherwise for each additional ice cream scoop you consume and that will cause your total utility to be higher.
You might also like to view...
Two identical firms have access to a spring. Their marginal cost of bottling water from the spring is a constant 10ยข per bottle. The market demand for bottled spring water is P = 250 - 20Q, where P is the price (in cents per bottle) and Q is the quantity demanded (in hundreds of bottles).
(i) Suppose the two firms form a successful cartel. How much bottled water will the firms produce, and what price will they charge? (ii) Suppose the firms behave as in the Bertrand model of oligopoly. How much bottled water will the firms produce, and what price will they charge? (iii) Suppose the firms behave as in the Cournot model of oligopoly. How much bottled water will the firms produce, and what price will they charge?
Saving to meet long-term objectives-such as retirement, college attendance, or to purchase a home,-is called ________ saving.
A. public B. precautionary C. bequest D. life-cycle
The market system is based upon _____
a. money b. voluntary exchange c. capitalism d. profits
If a toy store overestimates the demand for a toy in 2004 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as: a. investment in 2004
b. investment in 2005. c. consumption in 2004. d. consumption in 2005. e. a part of GDP when the toys are sold.