Which of the following constitutes an external cost of driving an automobile?

What are the marginal propensity to consume and level of autonomous consumption spending for a consumption function of the following form: C = 1,200 + 0.5DI?

a. The marginal propensity to consume is 0.5; autonomous consumption spending is $0.50. b. The marginal propensity to consume is 0.5; autonomous consumption spending is $1,200. c. The marginal propensity to consume is 1,200; autonomous consumption spending is $0.50. d. The marginal propensity to consume is 1,200; autonomous consumption spending is $600. e. There is insufficient information to answer this.

How might a restaurant manager use the concept of diminishing marginal utility to increase sales to her regular dinner customers?

a. She could expand the variety of options available at each price point on the dinner menu. b. She could increase portion size without raising the price of the dinner menu items. c. She could offer premium versions of dinner menu items to make the regular items seem more affordable. d. She could offer a discount on dessert only to people who order dinner.