"The second glass of Evian water was very good. May I have another?" Which of the following is necessarily true regarding this statement?
a. The marginal utility of the second glass is negative.
b. The marginal utility of the second glass is less than the marginal utility of the first glass.
c. The marginal utility of the second glass is positive.
d. The water is free.
e. The marginal utility of the third glass is negative.
C
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A differentiated product is one that:
a. is slightly different from the competitor's product, although it is a close substitute. b. is very different. c. is traded within firms and is not for sale in retail markets. d. has a shelf life of less than a year.
For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer
What will be an ideal response?