Author Question: According to the theory of utility maximization, a. people who buy tap water apparently feel the ... (Read 50 times)

EY67

  • Hero Member
  • *****
  • Posts: 531
According to the theory of utility maximization,
 a. people who buy tap water apparently feel the additional benefit (compared with bottled water) offsets the additional cost
  b. people who buy bottled water apparently feel the additional benefit (compared with tap water) offsets the additional cost
  c. the marginal utility of the last gallon of bottled water consumed exceeds the marginal utility of the first gallon of tap water consumed
  d. the marginal utility of bottled water exceeds the marginal utility of diamonds
  e. bottled water must be more expensive (per gallon) than tap water

Question 2

In purchasing diamonds and water, a consumer would maximize utility by
 a. dividing expenditure equally between those two goods
  b. equating the marginal utilities from each of those two goods
  c. equating average utility per diamond with average utility per unit of water
  d. equating the total utility per diamond with the total utility per unit of water
  e. equating marginal utility per dollar spent on each of those two goods



lkoler

  • Sr. Member
  • ****
  • Posts: 358
Answer to Question 1

B

Answer to Question 2

E



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

Adults are resistant to the bacterium that causes Botulism. These bacteria thrive in honey – therefore, honey should never be given to infants since their immune systems are not yet resistant.

Did you know?

Barbituric acid, the base material of barbiturates, was first synthesized in 1863 by Adolph von Bayer. His company later went on to synthesize aspirin for the first time, and Bayer aspirin is still a popular brand today.

For a complete list of videos, visit our video library