Which of the following is likely to occur as the result of the law of diminishing marginal utility?
A) Petra's utility from her second apple was less than her satisfaction from her first orange.
B) Sabine's utility from her first granola bar is greater than Rachel's utility from her second granola bar.
C) Wesley enjoyed his second bottle of iced tea less than his first bottle, other things constant.
D) Hudson enjoyed his second slice of pizza more than his first.
C
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Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What will happen to Canadian interest rates as a result of the leftward shift of the U.S. IS curve?
A) They will rise. B) They will fall. C) They will not change. D) The IS curve will show an increase.
Joan Jillson owns a coffee shop. Assume that the marginal product of the labor Joan employs (MPL) equals 500 cups per week and the marginal product of her shop's capital (MPK) equals 1,000
Assume also that the wage (w) Joan pays her workers equals $250 per week and the rental price (r) of her capital - her coffee machines - equals $500 per week. Which of the following correctly analyzes whether Joan is minimizing her costs? A) No, Joan is not minimizing her costs because MPL × w is less than MPK × r. B) No, Joan is not minimizing her costs because MPK is greater than MPL and r is greater than w. C) Yes, Joan is minimizing her costs because she is a price-taker in the markets for labor and capital. D) Yes, Joan is minimizing her costs because MPK/r equals MPL/w.