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View History Bookmarks People Window Help #5-EC0202 : × Pills & Automobiles (Officia × ps:/mdc. blackboard.com/webapps/assessmenthake/launch isp?course.assessment id- 325998.18course.jid- 4 e peanuts, if the marginal utlity of peanuts is greater than popcorn. QUESTION 23 As marginal utility decreases, total utility a. decreases at an increasing rate. b. decreases by the same amount. c, increases by the same amount. d. increases at a decreasing rate. e. increases by the inverse of marginal utility QUESTION 24 On a global perspective, per capita expenditures on health care are greater in the United States than a. neither Canada nor Mexico. b. both Canada and Mexico. c. in Mexico, but less than in Canada. d. in Canada, but less than in Mexico. Oe. in Mexico, but approximately equal to expenditures in Canada. QUESTION 25 A risk-neutral consumer a. will always refuse a fair gamble. b, avoids all risk. c. will always accept a fair gamble. d. is indifferent between acceptance and refusal of a fair gamble e, ensures that any higher risk is offset lower risk. Click Save and Submit to save and submit. Click Save All Answers to save all ansvers 23

Explanation / Answer

1) As marginal utility decreases, total utility

Solution: increases at decreasing rate

Explanation: Marginal utility is the rate of change of total utility, thus when the MU decreases, TU increases at decreasing rate

2) On a global perspective, per capita expenditure on health care are greater in the United States than in

Solution: both Canada and Mexico

Explanation: The per capita expenditure on health care are greater in the United States in comparison to the peer group including Canada and Mexico

3) A risk-neutral consumer

Solution: Is indifferent between accepting and refusing a fair gamble

Explanation: A consumer who is risk neutral will play the game if the odds axe favourable to him

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