Refer to Table 10-2. Holding prices constant, when Keira's income changed from $18 to $23, what happens to her total utility and to the marginal utilities of the last cup of soup and the last sandwich purchased?
A) Her total utility and the marginal utility of the last sandwich consumed increase but marginal utility of the last cup of soup consumed decreases.
B) Her total utility and the marginal utility of the last cup of soup consumed increase but marginal utility of the last sandwich consumed decreases.
C) Her total utility decreases but the marginal utilities of the last cup of soup and the last sandwich consumed increase.
D) Her total utility, the marginal utility of the last cup of soup consumed, and the marginal utility of the last sandwich consumed all increase.
E) Her total utility increases but the marginal utilities of the last cup of soup and the last sandwich consumed decrease.
E
You might also like to view...
According to the Application, one factor which was responsible for roughly one-third of hybrid vehicles purchased in 2007 was an increase in the price of gasoline
The increase in sales due to higher gasoline prices describes the economic concept of A) marginal thinking. B) rational self interest. C) using assumptions to simplify. D) ceteris paribus.
If Bank A holds $200 in reserves, deposits are $1000, and the desired reserve ratio is 15 percent, how much are excess reserves?
A) zero, because banks never hold excess reserves B) $200 C) $50 D) $150
Suppose for every dollar change in household wealth, consumption expenditures change by $0.05
If real household wealth declines by $45 billion, potential GDP is $120 billion, and the multiplier effect for the second year after an expenditure shock is 1.1, what is the total change in output relative to potential for the second year? A) -1.28% B) -1.73% C) -2.06% D) -5.78%
An effluent fee is imposed on a steel firm to reduce the amount of waste materials that it dumps in a river. Use the following two statements to answer this question:
I. The more easily factors of production can be substituted for one another (for example, capital can be used to reduce waste water), the more effective the fee will be in reducing effluent. II. The greater the degree of substitution of capital for waste water, the less the firm will have to pay in effluent fees. A) Both I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) Both I and II are false.