The Below Table Shows the Average Utility (In Utils) Obtained

question 40

Multiple Choice

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3

-It is often observed that, over the same period of time and for the same good, marginal utility declines rapidly for some consumers and very little for others. This observation illustrates:

• A)that economic theory is of little value in explaining consumer behavior.
• B)that consumers are not identical.
• C)tastes and preferences should not be included in any discussion of consumer choice.
• D)tastes and preferences among consumers are quite similar.
• E)that if consumers weren't identical, economic theory would not be able to provide insight into consumer behavior.

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Definitions:

General Sales Taxes

A tax imposed on sales transactions, usually calculated as a percentage of the sales price and collected by the seller at the point of purchase.

Personal Income Taxes

Taxes levied on the income of individuals, typically graduated so that higher income levels are taxed at higher rates.

Progressive

Describes a tax system where the tax rate increases as the taxable base amount increases, typically aimed at reducing income inequality.

Proportional

Having a constant relation in degree or number between two or more variables.