82. You go to an all-you-can-eat buffet. If you maximize utility, the marginal u

Question

82. You go to an all-you-can-eat buffet. If you maximize utility, the marginal utility of the last bite that you eat will be: A) equal to the price of the buffet. B) as high as possible C) zero. D) dependent on how much you like the buffet the marginal utility of all goods consumed is equal. B) the marginal utility per dollar spent is equal for all goods consumed. C) the price of all goods consumed is equal. D) total utility from all goods consumed is equal A) 84. If the price of coffee cups falls and the consumer decides to buy more coffee cups solely because they are less expensive, this describes the: A) income effect. B) substitution effect. o consumersurplus ffe 85. The substitution effect of a price change is described by the statement that: A) when the price of canning jars falls, consumers have more real income with the same nominal income and will buy more canning jars. when the price of canning jars falls, consumers will substitute these lower-priced canning jars for higher-priced goods. B) C) the substitution effectis the change in the number of canning jars purchased when D) the substitution effect shows how a change in income will affect the quantity of a the price of spatulas changes good purchased 86. The term diminishing returns refers to: A) a falling interest rate that can be expected as one's investment in a single asset increases. B) a reduction in profits caused by increasing output beyond the optimal point. C) a decrease in total output due to the firm hiring uneducated workers. D) a decrease in the extra output due to the use of an additional unit of a variable input when all other inputs are held constant.

Explanation / Answer

82.) The correct answer is (C)

Since here our marginal cost is 0, so we will et upto the point our marginal utility equals marginal cost that is 0.

83.) The correct answer is (B)

At optimal consumption bundle, the marginal utility per dollar spent is equal for all goods consumed.

84.) The correct answer is (A)

If price of coffee cups falls and we buy more of coffee cups solely beacause they are cheap, this represents the INCOME EFFECT.

85.) The correct answer is (B)

Substitution Effect is when the price of canning jar falls and consumers substitute this lower priced canning jars for higher priced goods.

86.) The correct answer is (D)

Diminishing Returns refers to a decrease in extra output due to the use of an additional unit of a variable input when all other inputs are held constant.

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