Diminishing marginal utility with rational behaviour

Assignment Help Macroeconomics
Reference no: EM1316091

All economics textbooks give examples that show diminishing marginal utility as consumption rises. In addition, these books show that negative marginal utility will occur at some high level of consumption. However, it could be argued that a rational buyer should never experience negative marginal utility. Why?

Reference no: EM1316091

Questions Cloud

Discrete distribution by estimating the probability : What is the probability that both defective lights will be found within three trials?
Population grows every year is fixed or constant : Assume that the amount your town's population grows every year is fixed or constant. Utilize your equation in part b to approximate the population in the year 2030.
The quadratic equations : the quadratic equations
Computation stock price and return by gordon growth model : Computation stock price and return by Gordon growth model and The dividend is expected to grow at a constant rate of 6 percent a year
Diminishing marginal utility with rational behaviour : All economics textbooks give examples that show diminishing marginal utility as consumption rises-However, it could be argued that a rational buyer should never experience negative marginal utility. Why?
Probability-randomly chosen employee : Let A be the event that a randomly chosen employee has a college degree and B the event that the chosen employee's income is more than $50,000.
Control charts this problem will be referred to in the study : Binomial Distribution: Control Charts this problem will be referred to in the study of control charts. In the binomial probability distribution, let the number of trials be n = 3, and let the probability of success be p = 0.0228.
Multiple questions on accounting principles : Multiple questions on accounting principles - Carter Cleaning completed the following transactions: Purchased $18,000 of Office Supplies for $8,000 cash and the remainder on credit. Purchased equipment for $7,950 on credit. As a result of these tr..
Graph the model as well as investigate it by four models : You will investigate four different scenarios of population growth also decline in this town. Graph the model as well as investigate it by four different growth models.

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Welfare of low skilled workers

Suppose the government is concerned that the going wage rate of $6 per hour for low skilled workers is too low.

  Analyzing factor endowment of country

Assuming that there are only two goods, and the other good (food) is capital intensive, show the equilibrium points of production and consumption in ALFA, before and after trade.

  Analysis of ad-as model

What is the main policy message of the AS-AD model, and how does it relate to the 1930s Keynesian revolution in economic theory? What should today's policy-makers assume about the natural rate of unemployment?

  Compute cross price elasticity of demand

A study sponsored by the American Medical Association suggests that the absolute value of the own price elasticity for surgical procedures is smaller than that for the own price elasticity for office visits. Explain why this would be expected

  Computing equilibrium price and quantity

Suppose the market for widgets can be described by the following equations: What is the equilibrium price and quantity?

  Computation of resulting income from insurance

Let's say you live in Montana and you like to ride mechanical bulls in bars on Friday nights. You estimate that over the next year there's a 4% probability you will incur medical bills of $20,000

  Fiscal stimulus and multiplier effect

If the desired fiscal stimulus is $20 billion and the desired AD increase is $50 billion, we can conclude that the MPC is:

  Inelastic demand and elastic demand

What happens to the equilibrium price and quantity in each market? Which product experiences a larger change in quantity? Which product experiences a larger change in price?

  Effects of consumption in aggregate demand of economy

In recent years, consumption spending by households has accounted for about 70% of the total spending (aggregate demand) in the U.S. economy.

  Perfectly competitive market examination

What are the firm's fixed costs? What is the firm's marginal cost? Now suppose other firms in the market sell the product at a price of $10.

  Expansion for solow growth model

According to the Solow growth model, a country that increases its rate of capital investment can overcome diminishing marginal returns to capital and achieve sustained high growth over time.

  Analysis of short run and long run price

You are a manager in a perfectly competitive market. The price in your market is $35. Your total cost curve is.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd