Erika's Utility with $3,000 of Wealth Is 6,000 and Her

question 12

Multiple Choice

Erika's utility with $3,000 of wealth is 6,000 and her utility with $3,001 of wealth is 6,005. Her marginal utility from gaining the additional $1 of wealth is

• A) 6,005.
• B) 3,001.
• C) 6,000.
• D) 5.

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Definitions:

Resource Prices

Resource prices are the costs associated with the inputs used in the production process, such as raw materials, labor, and capital.

Industry Expands

This phrase describes the process where the total output or the number of firms in a given industry increases due to factors such as innovation, increased demand, or favorable policies.

Long Run

A period in economic analysis where all factors of production are variable, allowing for complete industry adjustment.