Figure 27-1.The Figure Shows a Utility Function

question 59

Multiple Choice

Figure 27-1.The figure shows a utility function.
-Refer to Figure 27-1.Let 0A represent the distance between the origin and point A;let AB represent the distance between point A and point B;etc.Which of the following ratios best represents the marginal utility per dollar when wealth increases from $400 to $600?

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Definitions:

Income

The money received by an individual or organization, typically measured on a regular basis, for work or through investments.

MRS of Pencils

The marginal rate of substitution of pencils, indicating how much of another good a consumer is willing to give up for one more pencil.

Utility

In economics, a measure of satisfaction or happiness that a consumer derives from consuming goods and services.

Consumption Bundle

A collection of goods and services that an individual or household purchases over a given period.