Juan and Sophia have decided to stop studying economics and get a bite to eat. Juan wants to go for a pizza and Sophia wants a hamburger. They decide to go for pizza. What can we conclude from this?

A) Juan always gets more utility from pizza than Sophia does.
B) Sophia gets less utility from pizza than she could from a hamburger.
C) Sophia will get negative utility from the pizza.
D) Utility analysis does not work here since Sophia did not eat a hamburger.


Answer: B) Sophia gets less utility from pizza than she could from a hamburger.

Economics

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When tradable allowances are used to correct negative externalities in a market, the outcome:

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The economic way of thinking has to do with:

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