Smith Says She Gets 5 Utils from Consuming the Fifth

question 100

Multiple Choice

Smith says she gets 5 utils from consuming the fifth unit of a good whereas Jones says he gets 10 utils from consuming the fifth unit of a good. It follows that

• A)the fifth unit of the good means more to Jones than Smith.
• B)the fifth unit of the good means more to Smith than Jones.
• C)the fifth unit of the good means twice as much to Jones as it means to Smith.
• D)if the law of diminishing marginal utility holds, both Smith and Jones will get less utility from the sixth unit of the good than the fifth.
• E)a and d

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Definitions:

Supply of Product

The total amount of a product or service that is available for purchase at any given time.

Capacity

The maximum level of output that a company can sustain to produce a product or service.

Manufacturing Capacity

The maximum amount of goods a manufacturer can produce under normal working conditions in a given period.

Expensive Capacity

The increased costs associated with maintaining additional or higher-capacity resources than typically required to meet average demand.