Carvel advertises a football-shaped ice cream cake for $7; you can buy a second one for only $4 . What do they know about consumer preferences?
a. Consumers would never buy a second ice cream cake.
b. Two cakes are worth less to the consumer than one.
c. Marginal utility of ice cream cakes diminishes.
d. Consumers only value the first cake at $4.
e. Consumers value all cakes they eat at $4.
C
You might also like to view...
In the calculation of gross domestic product by the expenditure approach, the "investment" component is
A) net investment. B) gross investment minus depreciation. C) gross investment plus depreciation. D) gross investment.
Which of the following is a criterion by which Gordon judges the desirability of any given level of actual real GDP?
A) Actual real GDP is too low if it causes the unemployment rate to be higher than necessary. B) Actual real GDP is too high if it strains a nation's ability to produce and puts upward pressure on the inflation rate. C) Actual real GDP is at a desirable level if there is no tendency for inflation to accelerate or decelerate. D) All of the above.
Which fundamental economic question requires society to choose the technological and resource mix used to produce goods?
a. The What to Produce question. b. The Why to Produce question. c. The How to Produce question. d. The For Whom to Produce question.
What are two reasons diminishing returns to specialization occur? (Check both responses.)
What will be an ideal response?