Marginal utility is total utility divided by the number of units consumed
a. True
b. False
Indicate whether the statement is true or false
False
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Glen's friend Andre is a big strong guy. Andre will not allow anyone to harm Glen. Glen enjoys teasing people. In fact, Glen's marginal benefit of teasing people is given by: MB(Q) = 75 - 10Q. Generally, people do not enjoy Glen teasing them
Thus, they retaliate to Glen's teasing. Without Andre around to protect Glen from the retaliation, Glen's marginal cost of teasing people is MC(Q) = 20Q due to the retaliation. However, with Andre around, Glen perceives his marginal costs of teasing to always be zero as no one will retaliate with Andre around. This is because Andre will step in to protect Glen from retaliation. Without Andre around, what is Glen's choice for teasing? How much does Glen increase teasing when Andre's around? Is Glen's behavior characteristic of a moral hazard or adverse selection?
The free-market system coordinates output decisions by pushing
a. up price when there is a shortage. b. down price when quantity demanded exceeds quantity supplied. c. up price when there is a surplus. d. up price when quantity supplied exceeds quantity demanded.