Asked by Cassandra Lorenzo on May 12, 2024
Verified
The fact that an ounce of gold is priced higher than an ounce of chocolate suggests that
A) the marginal utility of the last unit of gold consumed or purchased is greater than the marginal utility of the last unit of chocolate consumed.
B) the total utility of gold purchased is greater than the total utility of chocolate consumed.
C) gold is a normal good, while chocolate is an inferior good.
D) there are many substitutes for chocolate but few for gold.
Marginal Utility
The additional benefit or utility gained from consuming an extra unit of a good or service.
Ounce of Gold
A unit of measure for weighing gold, where one ounce is equal to approximately 28.35 grams.
Ounce of Chocolate
A unit of measure representing the weight of chocolate, commonly used in purchasing or consuming chocolate.
- Understand the principle of marginal utility and its influence on consumer decision-making and expenditure patterns.
Verified Answer
AS
Ashley SpencerMay 17, 2024
Final Answer :
A
Explanation :
The price of a good is often related to its marginal utility rather than its total utility. Gold's higher price suggests its marginal utility is greater than that of chocolate, meaning the satisfaction gained from the last unit consumed or purchased is higher for gold than for chocolate. This does not necessarily relate to total utility, the classification of goods as normal or inferior, or the availability of substitutes.
Learning Objectives
- Understand the principle of marginal utility and its influence on consumer decision-making and expenditure patterns.
Related questions
Suppose That Your Demand Schedule for Jeans Is Shown in ...
Given the Information in the Table Below,find the Marginal Utility ...
Karen O'Brien Has the Demand Schedule for Grapefruit Shown in ...
(Table: the Utility of Macaroni and Cheese)Use Table: the Utility ...
The Amount by Which Total Utility _____ When an Additional ...