We Take One Dollar from a Millionaire and Give It

question 73

Multiple Choice

We take one dollar from a millionaire and give it to a pauper. Assuming a diminishing marginal utility of money,

• A)total utility in the economy must rise.
• B)total utility in the economy must fall.
• C)total utility in the economy must remain the same.
• D)we cannot say whether or not total utility changes.

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Definitions:

Credible Threat

A declaration or signal that one will take some negative action if conditions are not met, and it is believable and capable of being executed.

Oligopolistic Situation

A market condition where a few companies have the majority of market share and control over pricing.

Barriers to Entry

Factors that make it difficult for new firms to enter a market, often leading to reduced competition.

Dominant Strategies

Strategies in game theory that are preferable regardless of the opponent's actions, leading to a stable solution.