What is the utility-maximizing rule?
What will be an ideal response?
The utility-maximizing rule states that for a person to maximize utility, the person must allocate (spend) his or her entire budget and consume the quantities of goods and services so that the marginal utility per dollar from each good or service is equal to the marginal utility per dollar from all the other goods and services.
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Demand price elasticity is measured by the:
a. percentage change in income / percentage change in price. b. percentage change in quantity demanded / percentage change in income. c. percentage change in price / percentage change in quantity demanded. d. percentage change in quantity demanded / percent change in price. e. percentage change in total revenue / percentage change in price.
If pollution is bad, why do we still use pollution-causing resources such as coal and oil to generate electricity?
A. The transaction costs of pollution is too low. B. Pollution is only a private cost. C. Governments lack the political will to enforce the use of pollution free resources. D. The cost of using pollution free resources to generate power in many circumstances is much higher than generating that same power through conventional pollution-causing means.