The Host at a Party Offers Justin a Sixth Beer

question 153

Multiple Choice

The host at a party offers Justin a sixth beer.Justin says, "No thanks, man.The marginal utility of that fifth beer was, like, 20 cents, but the marginal utility of the sixth would be minus 10 cents." If Justin consumes the sixth beer, his total utility will

• A)rise by 10 cents.
• B)reach a plateau and remain constant.
• C)fall by 10 cents.
• D)fall below his marginal utility.

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Definitions:

Underground Economy

Economic activities that occur outside of official regulation or taxation systems, often including undocumented labor and illegal trade.

National Income Accounting

A system of accounts that countries use to measure the overall economic activity and the total income of their citizens.

Natural Resources

Raw materials and resources provided by nature without human intervention, crucial for economic production, such as minerals, forests, and water.

Base Year

The year with which other years are compared when constructing an index; the index equals 100 in the base year.