Suppose That for Jim the Marginal Benefit (MB)of Producing Is

question 1

Multiple Choice

Suppose that for Jim the marginal benefit (MB) of producing is $60 and that the marginal cost (MC) of producing is $10.Suppose also that his marginal benefit of stealing is $50 and the marginal cost of stealing is $10.Is Jim currently maximizing utility in terms of producing and stealing? If not,should he produce more and steal less,or produce less and steal more to move toward utility maximization?

• A) Yes,Jim is maximizing utility.
• B) No,Jim is not maximizing utility.Since the MB/MC ratio for producing is less than the MB/MC ratio for stealing,Jim should produce more and steal less.
• C) No,Jim is not maximizing utility.Since the MB/MC ratio for producing is greater than the MB/MC ratio for stealing,Jim should produce more and steal less.
• D) No,Jim is not maximizing utility.Since the MB/MC ratio for producing is greater than the MB/MC ratio for stealing,Jim should steal more and produce less.