Which of the following is correct?
A. There is no firm mathematical relationship between marginal utility and total utility.
B. Total utility is equal to the change in marginal utility from consuming an additional unit of a
product.
C. If marginal utility is diminishing and is a positive amount, total utility will increase.
D. If marginal utility is diminishing, total utility must also be diminishing.
Answer: C
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"If a natural monopoly is regulated using a marginal cost pricing rule, the firm makes zero economic profit." Is the previous statement correct or incorrect?
What will be an ideal response?
Suppose the prices of petroleum products, including gasoline and fuel oil, fell sharply. Which of the following would most likely occur as the result of the lower prices of petroleum products?
a. A reduction in the consumption of gasoline. b. An increase in demand for solar heating systems. c. An increase in demand for smaller, more efficient automobiles. d. A reduction in the demand for home insulation products.