Suppose That Ms

question 12

Multiple Choice

Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $2 and $4, respectively. The marginal utility of the last units of A and B are 16 and 24, respectively. These data suggest that Ms. Thomson

• A)has preferences that are at odds with the principle of diminishing marginal utility.
• B)considers A and B to be complementary goods.
• C)should buy less A and more B.
• D)should buy less B and more A.

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Definitions:

Force-Coercion

A strategy or approach that relies on using power, authority, or threats to obtain compliance or achieve objectives.

Direct Forcing

A conflict resolution strategy where one party aims to satisfy its interests regardless of the impact on others.

Prisoners' Dilemma

A situation in game theory in which two individuals acting in their own self-interest do not produce the optimal outcome for either party.