Sanjiv is a keyboard player in a progressive metal band. His band offers fans three types of merchandise with the band’s logo: buttons, stickers, and T-shirts. The band charges $20 for a T-shirt but offers buttons and stickers for free. How does marginal utility explain this decision?
a. The marginal utility of the buttons and stickers declines as fans take more, whereas the marginal utility of the T-shirts increases as fans buy more.
b. The marginal utility of an additional sticker or button is very low compared to the marginal utility of an additional T-shirt.
c. The marginal utility per dollar of the buttons and stickers is much higher than the marginal utility per dollar of the T-shirts.
d. It is easier for fans to reach consumer equilibrium by taking additional buttons and stickers than it is when buying additional T-shirts.
b. The marginal utility of an additional sticker or button is very low compared to the marginal utility of an additional T-shirt.
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A) $500 worth of General Motors common stock B) $500 worth of General Motors bonds C) A $500 travelers check D) A one-ounce gold coin
An open market sale by the Fed will
A) increase bank reserves. B) increase currency held by the public or vault cash. C) increase the money supply. D) reduce the money supply.
Is equilibrium always at an optimal level of output? Explain your answer.
What will be an ideal response?