Juan and Sophia Have Decided to Stop Studying Economics and Get

question 370

Multiple Choice

Juan and Sophia have decided to stop studying economics and get a bite to eat. Juan wants to go for a pizza and Sophia wants a hamburger. They decide to go for pizza. What can we conclude from this?

• A) Juan always gets more utility from pizza than Sophia does.
• B) Sophia gets less utility from pizza than she could from a hamburger.
• C) Sophia will get negative utility from the pizza.
• D) Utility analysis does not work here since Sophia did not eat a hamburger.

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Definitions:

Marginal Product

The additional output that is produced by adding one more unit of a specific input, ceteris paribus.

Wage

Compensation for labor services, typically expressed on an hourly, daily, or piecework basis.

Rental Price

The amount of money charged for the temporary use of a good, service, or property.

Services from Land

The benefits and outputs produced by natural resources without altering their original physical state, such as agricultural production, mining, and scenic views.