What will happen in a competitive market if consumers are unable to estimate accurately the marginal utilities of goods?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThere will be no change relative to a market where consumers know marginal utilities.bConsumers may over-estimate benefits and consume too much of a good.cConsumers may under-estimate benefits and consume too little of a good.dBoth b and c are possible.eAll three outcomes (a, b, and c) are possible.

One market characterized by incomplete information for consumers is the used car market. In the used car market, consumers don’t know the condition of the car being sold and therefore cannot accurately project their marginal benefit from consuming the car. Suppose that consumers distrust used car salesmen and expect the worst from the cars they sell. How will the quantity of used cars sold in the used car market compare to the efficient quantity and how will the price of used cars sold in the used car market compare to the price when the efficient quantity is sold?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThe quantity in the used car market will be too low relative to the efficient quantity and the price will be too low.bThe quantity in the used car market will be too high relative to the efficient quantity and the price will be too low.cThe quantity in the used car market will be too low relative to the efficient quantity and the price will be too high.dThe quantity in the used car market will be too high relative to the efficient quantity and the price will be too high.

How does the law of diminishing marginal utility impact consumer behavior and choices in a market?

If the marginal cost is zero, how much of a good should be produced?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.a“as much as possible”b“as much as possible” only if consumers derive any marginal benefit from the goodcthe allocatively efficient quantity of production is zeroddepends on the total cost

The concept of utility can be measured objectivelyTrueFalse

According to the principle of marginal decision-making, in order to make the best of any situation a decision-maker should:Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aconsider the impact on average costs and benefitsbtake the marginal costs and benefits of the action into accountclook at the total benefits received up to that pointdchoose a consumption level where marginal utility equals priceenever consume a good whose price is less than the marginal utility