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Question
After reading the nutritional label on the box of his favorite cookies, Ernesto was shocked to discover the high sugar content. As a result, cookies dont bring him the same satisfaction anymore, falling from 25 utils to 12 utils. Benefiting from more efficient machinery, Ernestos favorite cookie manufacturer also lowered the price per box. What happens to Ernestos marginal utility per dollar spent?
a. It increases.
b. It decreases.
c. It stays the same.
d. The rate of change decreases.
e. There is not enough information to determine.
Answer
This answer is hidden. It contains 74 characters.
Related questions
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What is the long-run consequence of a price ceiling law?
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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