Sierra likes chocolate-covered deviled eggs. After eating 10 chocolate-covered deviled eggs, she switches to strawberry ice cream covered in sauerkraut. We can conclude that
A. Sierra is minimizing her utility.
B. at this point, the chocolate-covered deviled eggs have a lower marginal utility per dollar spent than that of strawberry ice cream covered in sauerkraut.
C. the chocolate-covered deviled eggs made Sierra sick.
D. the chocolate-covered deviled eggs now have a negative marginal utility.
Answer: B
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People have a strong incentive to form rational expectations because
A) they are guaranteed of success in the stock market. B) it is costly not to do so. C) it is costly to do so. D) everyone wants to be rational.
The direct cost of debt depends on:
A. the interest rate. B. fiscal policy. C. the implementation lag. D. the amount of the deficit.
The first step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
Taking explicit account of a rival's expected response to a decision you are making is called:
A. strategic decision making. B. competitive decision making. C. economic decision making. D. monopolistic decision making.