On Thanksgiving, Jake's mother gives him a huge platter of food. If Jake were to keep eating just to please his mother (even when he really wanted to stop), his marginal utility would be:
a. the same as his total utility.
b. large.
c. minus one.
d. positive.
e. negative.
QUESTION 2In long-run equilibrium, a perfectly competitive firm's short-run marginal cost curve crosses the long-run average cost curve at the lowest point on the long-run average cost curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Marginal utility is the change in:
a. total utility when an extra unit of output is produced.
b. marginal utility when an extra unit of output is consumed.
c. total utility when an extra unit of output is consumed.
d. marginal utility when an extra unit of output is produced.
e. average utility when an extra unit of output is consumed.
QUESTION 4A perfectly competitive firm's short-run supply curve is its marginal cost curve below its average variable cost curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5If water is essential for life, while diamonds are not, then why is water cheaper than diamonds?
a. Because most people would rather die with a big diamond ring than live without one.
b. Because the total utility generated by diamonds is larger than the total utility generated by water.
c. Because most people do not understand their total need for water.
d. Because water is abundant, the marginal utility of water is low, and price reflects marginal utility, not total utility.
QUESTION 6In the short run, the supply curve for a perfectly competitive firm is its marginal cost curve for all levels of output.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Marginal utility (MU) equals:
a. P/Q.
b. Q/TU.
c. PQ/TU.
d. TU/P.
e. TU/Q.
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