John and Sally Have Identical Preferences Except Sally's Utility Units

question 76

Multiple Choice

John and Sally have identical preferences except Sally's utility units are exactly 10 times that of John's.Both have the same income and face the same prices.Choose the best response.

• A)John consumes 10 times the amount that Sally consumes.
• B)John receives 1/10 the satisfaction that Sally receives.
• C)Both will consume the same amount of all goods.
• D)John and Sally will have equal total utility.
• E)John and Sally will have equal marginal utility.

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Definitions:

Residual Demand Curve

The demand that remains for a firm's product after accounting for the demand captured by competitors in the market.

Supply Function

The mathematical relationship showing the quantity of a good or service that producers are willing to sell at each possible price.

Market Demand Curve

A graphical representation that shows the quantity of a product that consumers are willing and able to buy at various prices.

Cost Function

Represents the relationship between the cost of producing a good and the quantity produced, highlighting how costs change with changes in production volume.