If, for a Particular Consumer, the Marginal Utility of Ties

question 239

Multiple Choice

If, for a particular consumer, the marginal utility of ties is greater than the marginal utility of shirts, this consumer should:

• A) buy more ties and fewer shirts.
• B) buy more shirts and fewer ties.
• C) buy the same amount of each.
• D) not do anything until more information is available.

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Definitions:

Excise Tax

A tax levied on specific goods, services, or transactions, often imposed on alcohol, tobacco, and gasoline.

Supply Curve

A graphical representation showing the relationship between the price of a good and the amount of it that suppliers are willing to produce and sell.

Perfectly Inelastic

A scenario where the demand for a good does not change in response to changes in price, represented by a vertical demand curve.

Excise Tax

A tax charged on specific goods, such as tobacco and alcohol, usually to discourage their use and generate revenue.