Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then
A) the change in Adam's marginal benefit plus the change in Bob's marginal benefit is negative.
B) Adam's marginal benefit increases by more than Bob's marginal benefit decreases.
C) the change in Adam's marginal benefit plus the change in Bob's marginal benefit equals zero.
D) Adam's marginal benefit decreases by more than Bob's marginal benefit increases.
B
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Economists define investment to include purchases of
A) capital goods and inventories. B) capital goods, equity stocks, and inventories. C) capital goods, equity stocks, and bonds. D) capital goods, such as tools, instruments, and buildings. E) capital goods, household durable goods, and inventories.
A good is most likely to be inefficiently priced if
a. some of the resources used in its production are scarce. b. the good is private property. c. some of the resources used in its production are free. d. a corporation produces the good.