Intro to Micro Economics Avncr is maximizing total utility by buying sports maga

Question

Intro to Micro Economics

Avncr is maximizing total utility by buying sports magazines and protein supplements. For him to buy more sports magazines the price of sports magazines has to rise, the price of protein supplements, has to fall, the price of sports magazines has to fall. Since Avner is maximizing his utility, nothing can change the consumption of sports magazines. Most people would prefer to drive a luxury car that has all the options, but more people buy less expensive cars even though they could afford the luxury car because the marginal utility of the less expensive car is higher than that of luxury cars.. the marginal utility per dollar spent on the less expensive car is higher than that spent on luxury cars. car buyers are irrational. the total utility of less expensive cars is greater than that of luxury cars. One reason why, in the short run, the marginal product of labor might increase initially as more workers are hired is that specialization allows a worker to focus on one task, thereby increasing her proficiency at that task. the first workers hired get to use the best equipment, the best workers are hired first and later hires are not as skillful, beyond some point, a firm has hired too many workers.

Explanation / Answer

5.B. The price of sports magazines have to fall. ( Assuming his income is fixed, he can only buy a greater number of certain produc if the price of that procduct falls.)

6. B. The marginal utility per dollar spent on the less expensive cars is higher that that spent on luxury cars.

7. A. Specialisation allows a worker to focus on ne task, thereby increasing her proficiency at that task.

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