In Utility Analysis, a Utility Curve That Shows a Rapid

question 76

True/False

In utility analysis, a utility curve that shows a rapid increase in utility for initial amounts of money followed by a gradual leveling off for larger amounts of money is appropriate for a risk-seeking decision maker.

---

Definitions:

Profit-Maximizing Rule

A principle stating that profit maximization occurs when a firm expands output until marginal cost is equal to marginal revenue.

MR = MC

The condition for profit maximization in economic theory, where marginal revenue (MR) equals marginal cost (MC).

Economic Profit

The discrepancy across total turnover and total spendings, including expenses both explicit and implicit.

Profit Per Unit

The profit earned for each unit of a good or service sold, calculated by subtracting the cost per unit from the selling price per unit.