The total utility from consuming five donuts is 9, 19, 30, 38, and 45 utils, respectively. Marginal utility begins to diminish after consuming the ____ donut
a. first
b. second
c. third
d. fourth
c
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Under what circumstances might a government price ceiling lead to the development of a black market?
What will be an ideal response?
Refer to the above figures. Which panel represents the expected relationship between tax revenue and the sales tax rate if dynamic tax analysis is used?
A. Panel 1 B. Panel 2 C. Panel 3 D. Panel 4
Robinson Crusoe is stranded on an island. He finds that coconuts are freely available (zero harvest cost), but fish are difficult to harvest and require a lot of energy. As a result, harvesting fish has a high price. If coconuts and fish are imperfect substitutes, what is Robinson Crusoe likely to consume?
A) He will consume more coconuts than fish. B) He will consume more fish than coconuts. C) He will consume equal amounts of both goods. D) Not enough information is given.
Lisa consumes only pizzas (P) and burritos (B). Her utility function is U = P0.5 B0.5. The price of per pizza is $10 and the price per burrito is $5. In equilibrium, Lisa consumes 4 pizzas. Using Lisa's utility function, calculate how many burritos she consumes
What will be an ideal response?