Assume That the Marginal Utilities for the First Three Units

question 51

Multiple Choice

Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively.The total utility when 2 units are consumed is:

• A) 150.
• B) 200.
• C) 350.
• D) 475.

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Definitions:

Economic Models

simplified representations of complex economic processes or systems used to analyze behavior, make predictions, or provide insights into economic decision-making.

Loan

A form of financial agreement in which one party lends money to another, with the expectation that the money will be paid back with interest.

Interest Rate

The cost of borrowing money, expressed as a percentage of the amount borrowed.

Opportunity Cost

Opportunity cost is the cost of the opportunity forgone to pursue one option instead of another, representing the benefits an individual, investor, or business misses out on when choosing one alternative over another.