Refer to the information provided in Table 6.1 below to answer the question(s) that follow.
Table 6.1Number of Hamburgers per DayTotal UtilityMarginal Utility130?252?367?476?5?4Number ofSodas per DayTotal UtilityMarginal Utility120?235?347?457?5?7Refer to Table 6.1. The total utility of five hamburgers per day is
A. 76.
B. 80.
C. 96.
D. indeterminate from this information.
Answer: B
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Consumers must understand the economist’s law of diminishing marginal utility in order to maximize their satisfaction.
Indicate whether the statement is true or false.
Refer to the figure above, which shows domestic supply and demand. If P1 is equal to P2 (the world price) plus a tariff, then government revenue from the tariff is equal to
A) a + c B) b C) P1 ( Q3 - Q2 ) D) P2 [(Q2 - Q1 ) + (Q4 - Q3 )] E) a + b + c
If an economy initially starts away from the steady state ________
A) output will gradually fall over time B) the economy will converge to the steady state in the long-run C) consumption spending must be greater than investment spending D) consumption spending must rise
When we solve the firm's cost minimization problem by the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:
A) marginal product of labor. B) marginal product of capital. C) marginal cost of production. D) cost-output elasticity.