Evaluate the following statement. "As long as I am still enjoying this candy I am going to keep buying and eating more of it"
What will be an ideal response?
This confuses marginal and total utility. While it might be true that he is still receiving positive marginal utility from eating more of the candy it might not be the most rational thing for him to do in order to maximize his total utility. That is, he might be better off redirecting some of this expenditures toward another good that has a higher marginal utility per dollar.
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When a nation exports a good or service, employment in that industry
A) decreases. B) stays the same. C) increases. D) might change, but more information about what else the country exports is needed to determine if employment increases, decreases, or does not change. E) might change, but more information about what the country imports is needed to determine if employment increases, decreases, or does not change.
If more firms enter a market that initially had 20 firms in it, then the Herfindahl-Hirschman Index will ________
A) increase B) decrease C) not change D) change in an unpredictable direction