The law of diminishing marginal utility means that:
a. marginal utility is maximized when consumers get the same amount of total utility from every good they consume.
b. total utility is maximized when consumers get the same amount of marginal utility from the last unit of every good they consume.
c. beyond some point, added units of a product provide lower and lower amounts of marginal
utility.
d. a consumer would get less utility from the last unit of a good consumed when that good costs $3 than when it costs $1.
c
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Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a(n):
a. decrease in supply. b. increase in supply. c. decrease in quantity supplied. d. increase in quantity supplied.
A market transaction causes an externality if someone
A. directly involved in the transaction receives uncompensated benefits or costs from it. B. not directly involved in the transaction receives uncompensated benefits or costs from it. C. directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out. D. not directly involved in the transaction interferes in it by imposing regulations or product standards.