Suppose a friend gives you two pieces of gum, and you decide to have one piece now and save the other for tomorrow. You do this because:
a. the total utility you get from the two pieces of gum will be higher tomorrow.
b. the marginal utility you get from the second piece will be higher tomorrow.
c. the marginal utility you get from the second piece will be higher today.
d. the marginal utility you get from the first piece will be less today.
e. the total utility you get from the two pieces will be less tomorrow.
b
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The optimal amount of air pollution is
A) found by equating the marginal benefits from reducing pollution by one more unit with the marginal costs of reducing pollution by an additional unit. B) found by equating the total benefits from reducing pollution by one more unit with the total costs of reducing pollution by an additional unit. C) found by setting the marginal benefits from reducing pollution by one more unit equal to zero. D) a meaningless concept since we cannot monetize the environment.
One method of dealing with the unfairness of substantial price increases caused by a national crisis is for government to
a. impose price ceilings and allocate goods by issuing ration coupons b. print ration coupons and allow buyers to bid for them c. shift the supply curve to the left d. impose price floors to protect consumers e. shift the demand curve to the right