Which of the following is true, according to the law of diminishing marginal utility?
a. The marginal utility of Diane's second Coke is greater than the marginal utility of her third pretzel, other things constant.
b. The marginal utility of Diane's second Coke is greater than the marginal utility of Ken's third pretzel, other things constant.
c. The marginal utility of Diane's second Coke is greater than the marginal utility of her third Coke, other things constant.
d. The total utility of two Cokes is greater than the total utility of three Cokes, other things constant.
e. The marginal utility of Diane's second Coke is greater than the marginal utility of Ken's third Coke, other things constant.
c
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The productivity curve is a relationship between
A) real GDP per hour of labor and capital per hour of labor, with technology held constant. B) capital per hour of labor and technological growth. C) nominal GDP per hour of labor and capital per hour of labor, with technology held constant. D) real GDP per unit of capital and capital per hour of labor, with technology held constant. E) real GDP per hour of labor and capital per hour of labor whenever technological growth occurs.
Currently. the price of consuming housing src="https://qoschin.com/media/3/ppg__cognero__Chapter_06_Doing_the_quot_Best_quot_We_Can__media__3e7add47-491f-48be-8fcb-fd865a8ddf80.PNG" style="vertical-align: -8px;" width="17px" height="28px" align="absmiddle" />. At the same time, the government lowers the tax on other consumption, lowering the price from 
is lowered by the fact that home mortgage interest is tax deductible. Suppose the government proposed to eliminate this implicit subsidy of your housing consumption, raising the price from 
to 
to 
.
a. Write down your original budget constraint assuming the consumer has income I.
b. Suppose the utility function 
captures your tastes, and suppose 
, 
, 
, 
and 
. Write out the utility maximization problem for this consumer prior to any policy change.
c. How much housing and other goods will this consumer consume prior to any policy change?
d. When the policy change goes into effect, will this consumer still be able to afford the bundle you derived in (c)?
e. When the policy change goes into effect, what bundle will the consumer consume?
What will be an ideal response?