Elaine Values the Utility of Her First Cup of Coffee

question 44

Multiple Choice

Elaine values the utility of her first cup of coffee at $1; a second cup, $.75; and a third cup, $.50. If Elaine drinks three cups of coffee for breakfast, her marginal utility is equal to

• A) $.50, the value of her last cup of coffee.
• B) $1.00, the value of her first cup of coffee.
• C) $2.25.
• D) $1.50.

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Definitions:

Market Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.

Nonprice Competition

A marketing strategy where companies differentiate their products or services based on attributes other than price, such as quality, design, or brand reputation.

Pure Competition

A market structure characterized by a large number of sellers offering standardized products or services, with no single seller able to influence price or market conditions.

Standardized Product

Goods or services that are uniform in quality and specifications across all producers and marketplaces.