Question 47 1.32 pts The price of yogurt is $2, and John gains marginal utility

Question

Question 47 1.32 pts The price of yogurt is $2, and John gains marginal utility from his 2nd yogurt equal to 15 units. Fancy chocolate bars are $4 and John gains marginal utility from his 1st bar equal to 25 units. If John is a rational consumer who is constrained by his budget, which item should he buy? He should purchase the yogurt since it is cheaper. He should purchase the fancy chocolate bar since it costs more He should purchase the fancy chocolate bar since he gains higher utility. He should purchase the yogurt since he gains higher utility per dollar. Question 48 1.32 pts James can make 40 burritos in one hour and Nancy can also make 40 burritos in one hour. If they work together, they can make 90 burritos in one hour. Using economic theory, how is this possible? James and Nancy can specialize in tasks to be more productive together. James wants to impress Nancy, so he works harder. The law of diminishing marginal returns. Competition between James and Nancy increases productivity.

Explanation / Answer

47) Last option is correct because MU per dollar for yogurt is 15/2 = 7.5 and that of chocolate bar is 25/4 = 6.25. Hence MU per dollar is higher for yogurt.

48) First option is correct because competitive advantage will allow them to raise their collective productivity

49) Last option is correct because diminishing marginal returns will increase marginal cost greater than marginal benefit after an optimum number of workers are hired

50) First option is correct as there are very few substitutes for insulin

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