Suppose Two Out for Coffee and Donuts at the Local

question 23

Multiple Choice

Suppose two out for coffee and donuts at the local donut store.The first donut you eat tastes incredibly good.The second one also tastes pretty good.The third donut seems just okay.With the fourth donut you are turning somewhat green.The fifth donut makes you sick.Your friend,an economist,describes your experience as the principle of:

• A)utility maximization.
• B)irrationality in consumer behavior.
• C)instant gratification.
• D)differing tastes and preferences.
• E)diminishing marginal utility.

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Definitions:

Domestic Producer

A company or individual that manufactures goods within their home country.

Foreign Producer

A company that produces goods or provides services in a country other than the one where the company is based.

Balance of Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to more money leaving the country than coming in.

Exports Fewer

A situation where a country sells fewer goods or services abroad than in previous periods.