Suppose Renee Can Increase Her Total Utility from Consuming Video

question 92

Multiple Choice

Suppose Renee can increase her total utility from consuming video rentals and books by buying one more book and renting one fewer video.Which of the following is true?

• A)The marginal utility of video rentals is negative.
• B)The marginal utility per dollar spent on books exceeds that of video rentals.
• C)The marginal utility of the last book consumed exceeds the marginal utility of the last video rental consumed.
• D)The marginal utility of the last video rental consumed exceeds the marginal utility of the last book consumed.

Recognize the impact of price elasticity of demand on profit-maximizing output levels.

Understand the role of governmental intervention in markets through taxation or subsidies.

Apply concepts of social efficiency and Pareto improvements in market scenarios.

Understand the concept of marginal revenue and its calculation.

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Definitions:

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