Use the concept of diminishing marginal utility to explain why we would be more likely to see an all you can eat pizza buffet rather than an all you can carry sunglass "buffet."
As more food is consumed at one buffet sitting, the marginal utility declines substantially. At some point additional food could actually feature a negative marginal utility if the individual become sick from eating too much. However, the marginal utility of additional pairs of sunglasses does not decline a significantly and is unlikely to be negative since additional pairs will benefit the individual or could be given as gifts.
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The table below represents Freedonia's macroeconomic data for Year 1 and Year 2. Suppose that the production function is given by Y = AK0.25N0.75. Between Year 1 and Year 2, total factor productivity of Freedonia's economy increased by
A) -1.5%. B) 5.0%. C) 5.5%. D) 12.7%.
Prior to financial deregulation, the store of value and medium of exchange functions of money were maintained separate among asset classes because the regulatory agencies
A) precluded the payment of interest by checking accounts. B) allowed the payment of interest by checking accounts. C) specifically prohibited money market stock funds. D) allowed the payment of interest on passbook savings accounts.
A demand curve for The Steel Porcupines' concert tickets would show the:
A. number of tickets the box office is willing to sell at various prices. B. number of people who need tickets. C. quality of people who want to buy these concert tickets. D. number of tickets that will be purchased at various prices.
If activists successfully lobbied government to force firms to produce more output than they normally would in a perfectly competitive market,
A) consumer surplus would decline. B) producer surplus would increase. C) taxation would solve the problem. D) total surplus in the market would decline.