Milk Costs $2 and the Last Unit Provides $4 in Marginal

question 95

Essay

Milk costs $2 and the last unit provides $4 in marginal utility.Cheese costs $4 and the last unit provides $2 in marginal utility.Is this an efficient allocation of resources? If so, why? If not, why not?

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Definitions:

Unconditioned Stimulus

In traditional conditioning, a stimulus instinctively and spontaneously evokes a reaction without any previous learning.

Little Albert

is a reference to a famous psychology experiment by John B. Watson and Rosalie Rayner that studied classical conditioning in humans, particularly the development of a fear response in a young boy.

Loud Noise

A sound that is high in volume or intensity, which can be distracting or harmful, causing stress, hearing loss, or other negative effects on health and well-being.

Observational Learning

A learning process through which behaviors are acquired by watching and imitating the actions of others.