If Allison's Marginal Utility of Her 100th Dollar of Income

question 96

Multiple Choice

If Allison's marginal utility of her 100th dollar of income is greater than Brad's marginal utility of his 10th dollar, then we can conclude:

• A) money means more to Allison.
• B) money means more to Brad.
• C) Brad is richer than Allison.
• D) Allison is richer than Brad.
• E) nothing, since we can't make interpersonal utility comparisons.

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Definitions:

Discouraged Workers

Individuals who are not actively seeking work because they believe no jobs are available for them or there are none for which they would qualify.

Unemployed

Refers to individuals who are without a job but are actively seeking work.

Contraction

The downturn of the business cycle, when real GDP is declining.

Recovery Phase

A period within the economic cycle where activity rebounds following a recession, characterized by increasing GDP, employment, and investment.