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Henry Can Make a Bird House in 3 Hours and He

question 158

True/False

Henry can make a bird house in 3 hours and he can make a bird feeder in 1 hour. The opportunity cost to Henry of making a bird house is 1/3 bird feeder.


Definitions:

Marginal Utility Per Dollar

The additional satisfaction or utility gained from spending one more dollar on a good or service.

Consumer Equilibrium

A state where the consumer has allocated their resources in such a way that maximizes their utility, given their budget constraint.

Income And Substitution Effects

The changes in quantity demanded of a good due to a change in income (income effect) or a change in price leading consumers to substitute one good for another (substitution effect).

Demand Curve

A visual chart that illustrates how the quantity of a product demanded by customers varies according to its price.

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