Why is it not sufficient to just compare the marginal utility of two goods when maximizing utility?
Please provide the best answer for the statement.
Though one good might have a higher marginal utility level than another good, an important aspect to take into account is the dollar value necessary to gain that utility. If two goods, A and B, have marginal utilities of 16 and 12, respectively, only looking at the marginal utility would suggest that the consumer should consume more of A than B at that given quantity. However, let’s say the price of good A is $8 and the price of good B is $4. These values give marginal utilities per dollar of $2 and $3, respectively. In this case, the consumer gains the most marginal utility per dollar from consuming more of good B. In sum, it is important to not only account for the total comparative marginal utilities of two goods, but also the dollar value necessary to receive those additional units of utility.
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Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q362g1.jpg" alt="" style="vertical-align: 0.0px;" height="117" width="538" />If one store is located at A and the other store is located at C:
A. 100 people will certainly shop at each store, but where the other 100 will shop is indeterminant.
B. 100 people will shop at the store at A, and 200 people will shop at the store at C.
C. 200 people will shop at the store at A, and 100 people will shop at the store at C.
D. 150 people will shop at each store.
The short-run aggregate supply curve is vertical when inflation is predicted accurately.
Answer the following statement true (T) or false (F)
Which of the following statements is true?
A) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the buyers' willingness to pay for a good. B) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the sellers' willingness to accept payment for a good. C) The basis for first-degree price discrimination is differences in willingness to pay, whereas the basis for third-degree price discrimination is differences in the sellers' willingness to accept payment for a good. D) The basis for first-degree price discrimination is differences in the seller's willingness to accept payment for a good, whereas the basis for third-degree price discrimination is differences in buyers' willingness to pay for a good.
The federal government can fund financially strained programs by
(a) Decreasing taxes (b) Increasing funding across all programs (c) Destroying money (d) Issuing U.S. Treasury bonds