Refer to the Above Diagrams That Show Identical Marginal Utility

question 142

Multiple Choice

Refer to the above diagrams that show identical marginal utility from income curves for Singer and Catalano.If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5000,the marginal utility:

• A) of the last dollar of income will be greater for Catalano than for Singer.
• B) derived from the last dollar will not be comparable between the two income receivers.
• C) of the last dollar of income will be the same for both Singer and Catalano.
• D) of the last dollar of income will be greater for Singer than for Catalano.

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Definitions:

Private Good

A product or service that is excludable and rivalrous, meaning its use by one individual prevents others from using it, and it can be kept exclusive to those who pay for it.

Marginal Cost

The rise in cost resulting from the manufacture of an additional unit of a product or service.

Public Good

A product or service that is non-excludable and non-rivalrous, meaning that one's use of the good does not reduce its availability to others.

Positive Externality

A benefit that is enjoyed by a third-party resulting from an economic transaction to which they were not involved.