Author Question: According to the theory of utility maximization, a. people who buy tap water apparently feel the ... (Read 49 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?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Did you know?

In Eastern Europe and Russia, interferon is administered intranasally in varied doses for the common cold and influenza. It is claimed that this treatment can lower the risk of infection by as much as 60–70%.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

For a complete list of videos, visit our video library