The marginal utility of the first smoothie that Jimmy drinks in the morning is worth $3.00. The marginal utility of the 4th smoothie he drinks is positive while the marginal utility of the 5th smoothie he drinks in the morning is worth $0. This implies that at a price of $0, Jimmy would drink
A. at most 5 smoothies per morning.
B. an infinite number of smoothies each morning.
C. more than 5 smoothies per morning, but the actual number is indeterminate from this information.
D. zero smoothies per morning.
Answer: A
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The marginal utility of a unit of good X
A. is always greater than the total utility of X. B. is always less than the average utility of X. C. generally depends on how much X the consumer already has. D. is always equal to the price of X.
Which of the following is subtracted from net national product to arrive at national income?
a. net income of foreigners b. depreciation c. indirect business taxes d. transfer payments
Which of the following would be expected if the tariff on foreign-produced shoes were decreased?
a. The domestic price of shoes would fall.
b. The supply of foreign shoes to the domestic market would decline, causing shoe prices to rise.
c. The number of unemployed workers in the domestic shoe industry would decline.
d. The demand for foreign-produced shoes would decrease, causing the price of shoes to increase in other nations.
When an international financial crisis occurs
A. financial flows can slow to a trickle, influencing economic growth. B. there are no serious financial effects that last more than a few months. C. investors sell off bonds and restrict loans as a mechanism to help the country recover. D. financial lenders protect their investments by pouring money into the ailing country.