The reason why people are charged for an additional can of soda they get from a soda machine, but are not charged for an additional paper taken from a newspaper dispensing machine, is that the marginal utility of an additional:
A. Soda is close to zero, but the marginal utility of an additional paper diminishes slowly
B. Soda diminishes slowly, but the marginal utility of an additional paper is close to zero
C. Soda increases by more than that of the newspaper as consumption increases
D. Newspaper increases by more than that of soda as consumption increases
B. Soda diminishes slowly, but the marginal utility of an additional paper is close to zero
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An "open market operation" is said to occur when the Fed
A) arranges for the merger of two banks. B) changes the interest rate at which it lends reserves. C) transfers reserves between banks. D) buys or sells government securities.
When the marginal benefit and marginal cost of sodas are equal, then
A) the production of sodas might be allocatively efficient but it is definitely production inefficient. B) the allocatively inefficient amount of sodas is being produced. C) more sodas should be produced to reach the allocatively efficient quantity. D) fewer sodas should be produced to reach the allocatively efficient quantity. E) the allocatively efficient amount of sodas is being produced.