The burden of a tax is shifted toward buyers if:?

5. The burden of a tax is shifted toward buyers if:





a. Demand is perfectly elastic.


b. Demand is relatively more elastic than supply.


c. Demand is relatively more inelastic than supply.


d. Demand and supply have equal elasticities.





6. "Utility" is most closely related to the term:





a. Useless


b. Require


c. Necessary


d. Satisfaction





7. Marginal utility is best described as ________________.





a. The additional satisfaction gained by consumption of the last good


b. The per unit satisfaction of the good consumed


c. The total satisfaction gained from the total consumption of the good


d. The change in satisfaction from consuming one additional unit of the good





8. As more of a good is consumed, then total utility typically:





a. Increases at a decreasing rate.


b. Decreases as long as marginal utility is negative.


c. Decreases as long as marginal utility is positive.


d. Is negative as long as marginal utility is decreasing.

The burden of a tax is shifted toward buyers if:?
5-c


6-d


7-a (let's say MU2 is the utility of consuming the second unit and MU1 is the utility of consuming the first unit. Accordind to D. answer, percentage Marginal Utility would be (MU2-MU1)/MU1, which is obviously wrong). In order to know the Total Marginal Utility, we have to add the marginal Utility of every item purchased, so we have to know the MU2. So, MU2 cannot be known by Total Utility - MU1. MU2 is the additional satisfaction and not the change in satisfaction.





About question 8: Most of goods we purchase, have positive marginal utility. Now, we all know the law of diminishing marginal utility, so answer A. is right.


At the same time, if a good has negative marginal utility, answer B. is right as well.





Knowledge is not only about answering questions, but to set better (and correct) questions. So, in my very humble opinion, your teacher needs more homework in order to set questions.





I hope this helps
Reply:5) c


6) d


7) d


8) a


I took into account that you may have negative utility by consuming more goods in question 7 so i chose d as the answer; A doesn't take into account zero, or negative utility (satisfaction), for example the 32nd hot dog at a hot dog eating competition. As for question 8 it is simply the law of diminishing return, clearly A. Even if the utility is negative it still increases at a decreasing rate ex: -1,-2,-4,-7...a bell curve.





The marginal utility of a good or service is the posited quantified change in utility obtained by using one more or one less unit of that good or service.





Total Utility - Marginal Utility1 = Marginal Utility2
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Reply:5)c


6)d
Reply:5-c


6-d


7-a !!!


8-b !!!

rose