Water is essential to life, while diamonds are not. However, water is cheap and diamonds are expensive. This paradox can be resolved by focusing on:
A) total utility rather than average utility.
B) average utility rather than marginal utility.
C) marginal utility rather than total utility.
D) total utility rather than marginal utility.
E) average utility rather than total utility.
Answer: C) marginal utility rather than total utility.
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A preference for either taxes or permits to regulate pollution is dependent on the relative shape of what two curves?
a. Total cost of damage curve and total cost of pollution reduction curve b. Marginal revenue of pollution control curve and marginal cost of damage curve c. Marginal cost of pollution reduction curve and marginal cost of damage curve d. Marginal benefit of pollution curve and marginal revenue of pollution curve e. Marginal utility of pollution curve and marginal cost of regulation
Agraria specializes in the production of cotton. However, cotton manufacturers in Agraria are expecting the demand for its exports to fall sharply due to growing competition from a neighboring country
Assuming all else equal, which of the following is likely to happen in this case? A) The equilibrium unemployment in Agraria will fall. B) The equilibrium real wage in Agraria will rise. C) Investment expenditure in Agraria will rise. D) Consumption expenditure in Agraria will fall.