Answer the following statements true (T) or false (F)
1. Marginal utility is the accumulation of the total utility from successive units of a good or service consumed.
2. The law of diminishing marginal utility suggests that the total utility that a consumer derives from a product will increase slower and slower as more of the product is consumed.
3. If total utility increases as consumption of a good increases, then marginal utility must be increasing also.
4. With diminishing marginal utility, if a consumer reduces her consumption of a good, then her marginal utility from that good would increase.
5. The price of chicken = 5 while the price of pork = 9. If, after spending her entire budget, the consumer has MU of chicken = 6 while the MU of pork = 12, then the consumer should have bought more chicken and less pork in order to increase his total utility.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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A single-price monopoly has the demand and marginal cost schedules given in the above table. What is the profit-maximizing level of output and price?
What will be an ideal response?
The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year.
With the open trade economy, Silvia and Art can consume any combination of beef and computers from the line
A. PY. B. XYZ. C. PQ. D. XY.