MECON FINAL
If a monopolist is producing a quantity that generates MC > MR, then profit: A) is maximized. B) is maximized only if MC = P. C) can be increased by increasing price. D) can be increased by decreasing price.
C) can be increased by increasing price.
In a perfectly competitive industry, the market demand curve is usually: A) perfectly inelastic. B) perfectly elastic. C) downward sloping. D) relatively elastic.
C) downward sloping
For large beer breweries, it is common for average total cost to decline as output increases. This indicates that many breweries achieve: A) diseconomies of scale. B) diminishing marginal returns. C) economies of scale. D) constant returns to scale.
C) economies of scale.
An analytical approach through which strategic choices can be assessed is called: A) benefit-cost analysis. B) econometric theory. C) game theory. D) monopolistic competition.
C) game theory.
The market structure characterized by a few interdependent firms and in which there are barriers to entry is called: A) monopolistic competition. B) perfect competition. C) oligopoly. D) monopoly.
C) oligopoly.
(Figure and Table: Variable, Fixed, and Total Costs) In the accompanying figure, marginal cost of increasing production from 51 to 64 bushels of wheat is: A) $16. B) $15.38. C) $12.50. D) $18.75.
B) $15.38.
Jane spends all her income on goods X and Y and is purchasing the optimal consumption bundle. If the MUX/MUY = 3 and the price of X is equal to $12, then the price of Y is equal to: A) $36. B) $4. C) $12. D) $3.
B) $4.
Chuck spends all his income on two goods: tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshakes is $2. Put tacos on the horizontal axis and put milkshakes on the vertical axis. The slope of Chuck's budget line is equal to: A) -1/5. B) -5. C) 1/5. D) 5.
B) -5.
5. (Figure: Cost Curves and Profits) The market for corn is perfectly competitive, and an individual corn farmer faces the cost curves shown in the accompanying figure. If the price of a bushel of corn in the market is $4, then the farmer will produce ______ of corn and earn an economic ______ equal to ______. A) 0 bushels; loss; average fixed costs B) 0 bushels; loss; total fixed costs C) 3 bushels; loss; $30 per bushel D) none of the above
B) 0 bushels; loss; total fixed costs
(Table: Marginal Utility per Dollar) According to data in the accompanying table, if the price of clams is $3 per pound, while the price of potatoes is $1 per pound, and this consumer has $9 to spend on potatoes and clams, then the utility-maximizing combination is _____ pounds of clams and _____ pounds of potatoes. A) 0; 9 B) 2; 2 C) 1; 6 D) 2; 3
C) 1; 6
(Figure: Cost Curves and Profits) The market for corn is perfectly competitive, and an individual corn farmer faces the cost curves shown in the accompanying figure. If the price of a bushel of corn in the market is $10, then the farmer will produce ______ of corn and earn an economic ______ equal to ______. A) 0 bushels; loss; average fixed costs B) 0 bushels; loss; total variable costs C) 3 bushels; loss; total fixed costs D) 3 bushels, loss; $30 per bushel
C) 3 bushels; loss; total fixed costs
In oligopoly, a firm must realize that: A) what it does has no effect on the other firms in the industry. B) it must pursue policies while always remembering those policies will be ignored by other firms in the industry. C) it is in an industry in which another major firm may dominate, and the firm will need to judge its actions accordingly. D) collusion was made legal in 2004.
C) it is in an industry in which another major firm may dominate, and the firm will need to judge its actions
(Figure: Average Total Cost Curve) In the accompanying figure, the total cost of producing 3 pairs of boots is approximately: A) $24. B) $72. C) $75. D) $216.
D) $216
13. (Figure: Monopoly Model) When the firm is in equilibrium (that is, maximizing its economic profit), its total revenue is the area of rectangle: A) SPDB. B) IPDH. C) 0SBJ. D) 0PDJ.
D) 0PDJ.
(Table: Utility from Burgers and Milkshakes) David's marginal utilities for milkshakes and burgers are given in the accompanying table. The price of milkshakes is $2, and the price of burgers is $5. If David's income is $22, how many milkshakes and how many burgers does he buy to maximize his utility? A) 1 shakes and 1 burger B) 6 shakes and 0 burgers C) 5 shakes and 1 burger D) 6 shakes and 2 burgers
D) 6 shakes and 2 burgers
If Jakob knows the marginal cost of producing the 7th sports jersey is $21, then the total cost of 7 sports jerseys is: A) $21. B) $60. C) $147. D) The answer cannot be determined from the above information.
D) The answer cannot be determined from the above information.
4 If price is consistently below average total cost, then in the short run a perfectly competitive firm should: A) shut down. B) continue to produce to minimize losses. C) raise price. D) There is not enough information given to answer this question.
D) There is not enough information given to answer this question.
The relationship between an individual's consumption bundle and his/her utility is called A) a demand function. B) a production function. C) a consumption function. D) a utility function.
D) a utility function.
If firms are making positive economic profits in the short run, then in the long run: A) the short-run industry supply curve will shift rightwards. B) firms will enter the industry. C) industry output will rise and price will fall D) all of the above will occur.
D) all of the above will occur.
In the short run, a monopoly will stop producing if: A) P < ATC. B) P < AVC. C) P > MR. D) P > ATC.
B) P < AVC.
A perfectly competitive firm is definitely earning an economic profit when: A) MR > MC. B) P > ATC. C) P > MC. D) P > AVC.
B) P > ATC
Darren runs a barbershop with average fixed costs equal to $60 per day and a total output of 50 haircuts per day. What is his weekly total fixed cost if he is open six days per week? A) $18,000 B) $3,000 C) $60 D) The answer cannot be determined with information available.
A) $18,000
3. Kaile Cakes is currently producing 10 cakes per day. The marginal cost of the 10th cake is $24, and average total cost of 10 cakes is $6. The average total cost of 9 cakes is: A) $4. B) $5. C) $6. D) $8.
A) $4.
(Figure: Average Total Cost Curve) In the accompanying figure, the total cost of producing 5 pairs of boots is approximately: A) $408. B) $82. C) $108. D) $17.
A) $408.
(Figure and Table: Variable, Fixed, and Total Costs) In the accompanying figure, when 51 bushels of wheat are produced, average fixed cost is ______, average variable cost is ______, and average total cost is ______. A) $7.84; $11.76; $19.60 B) $133.33; $200; $333.33 C) $400; $600; $1,000 D) $5.33; $13.33; $18.67
A) $7.84; $11.76; $19.60
1. (Figure: Revenues, Costs, and Profits) In the accompanying figure, if the market price is $9, the profit-maximizing quantity of output is: A) 0. B) 1. C) 2. D) 3.
A) 0.
14 (Figure: Cost Curves and Profits) The market for corn is perfectly competitive, and an individual corn farmer faces the cost curves shown in the accompanying figure. If the price of a bushel of corn in the market is $14, then the farmer will produce ______ of corn and earn an economic ______ equal to ______. A) 4 bushels; profit; $0. B) 4 bushels; profit; just less than $80 per bushel C) 2 bushels; profit; $0 D) 2 bushels; loss; just more than $80 per bushel
A) 4 bushels; profit; $0.
9. Chuck spends all his income on two goods: tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshakes is $2. The vertical intercept for Chuck's budget line is equal to ______ units of milkshakes. A) 50 B) 10 C) 5 D) 100
A) 50
(Figure: Marginal Product of Labor) Using the marginal product of labor curve in the accompanying figure, the total product of labor for 3 workers is: A) 51 bushels. B) 45 bushels. C) 39 bushels. D) 15 bushels.
A) 51 bushels.
(Table: Labor and Output) Referring to the accompanying table, the average product when 4 workers are employed is: A) 9. B) 36. C) 10. D) 6.
A) 9.
Which of the following is true? A) A monopoly firm is a price-maker. B) MR = P if the demand curve is downward-sloping. C) MR = MC is a profit-maximizing rule for firms in perfect competition only. D) Monopolies tend to charge lower prices than perfectly competitive firms.
A) A monopoly firm is a price-maker.
Suppose Cyd knows the average cost of producing 9 scones is $5, while the average cost of producing 10 scones is $5.20. What is the marginal cost of the 10th unit? A) The marginal cost is $7. B) The marginal cost is $5.20. C) The marginal cost is $0.20. D) None of the above is correct.
A) The marginal cost is $7.
4. Gary's Gas and Frank's Fuel are the only two providers of gasoline in Smalltown. Gary and Frank decide to form a cartel. Later, Gary summarizes his pricing strategy as, "I'll cheat on the cartel because regardless of what Frank does, cheating gives me the best payoff." This is an example of: A) a dominant strategy. B) a tit-for-tat strategy. C) an irrational strategy. D) product differentiation.
A) a dominant strategy.
If the Herfindahl-Hirschman Index (HHI) for an industry is 900, this market is considered: A) a strongly competitive market. B) a somewhat competitive market. C) oligopolistic. D) monopolistic.
A) a strongly competitive market.
11. For Heidi, the marginal cost of producing one additional photograph equals the ______ divided by ______. A) change in total cost; the change in the number of photographs B) change in marginal cost; the change in the number of photographs C) change in total cost; the change in the marginal product of photographs D) change in average cost; the change in the number of photographs
A) change in total cost; the change in the number of photographs
Zoe's Bakery determines that P < ATC and P > AVC. Zoe should: A) continue to operate even though she is enduring an economic loss. B) continue to operate as she is making an economic profit. C) shut down immediately as she is enduring an economic loss. D) raise the price until she has maximized her profits.
A) continue to operate even though she is enduring an economic loss.
One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a ________ demand curve, while the purely competitive firm has a ________ demand curve. A) downward-sloping; perfectly elastic B) perfectly inelastic; perfectly elastic C) downward-sloping; perfectly inelastic D) perfectly elastic; downward-sloping
A) downward-sloping; perfectly elastic
The most important source of oligopoly is: A) economies of scale. B) government-created barriers. C) technological superiority. D) ownership of resources.
A) economies of scale.
To say that you can't have too much of a good thing means that for any good that you enjoy (say pizza) A) higher consumption will always lead to greater utility. B) higher consumption will cause utility to increase at an increasing rate. C) higher consumption will increase utility but only up to a point; after that utility will start to decrease. D) it is valid to measure utility in utils.
A) higher consumption will always lead to greater utility.
In perfect competition, the assumption of easy entry and exit implies that: A) in the long run all firms in the industry will earn zero economic profits. B) in the short run all firms in the industry will earn positive economic profits. C) in the short run all firms in the industry will earn zero economic profits. D) a and b are correct.
A) in the long run all firms in the industry will earn zero economic profits.
6. Jessica spends all her income on two goods, A and B. The price of A is $5, and the price of B is $7. At the current consumption bundle, the marginal utility of A is 10, and the marginal utility of B is 21. To maximize utility given her income, Jessica should: A) increase her consumption of B and decrease her consumption of A. B) increase her consumption of A and decrease her consumption of B. C) continue to consume the current bundle. D) none of the above
A) increase her consumption of B and decrease her consumption of A.
A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8 and MR = $9, in order to maximize profits (or minimize losses), this firm should: A) increase output. B) reduce output. C) shut down. D) do nothing; the firm is already maximizing profits.
A) increase output
8. (Figure: Marginal Revenue, Costs, and Profits) In the accompanying figure, if market price increases to $20, marginal revenue ______ and profit-maximizing output ______. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
A) increases; increases
6. The market demand curve: A) is the horizontal summation of the individual demand curve of all consumers. B) is the vertical summation of the individual demand curve of all consumers. C) cannot be derived from the individual demand curve of all consumers. D) has no relation to individual demand.
A) is the horizontal summation of the individual demand curve of all consumers.
Assume an industry is dominated by a few firms. Each of these firms acknowledges that its own choices affect the choices of its rivals. Each firm also recognizes that its rivals' choices affect the decisions it makes. This industry is an example of a(n): A) monopoly. B) oligopoly. C) monopolistic competition. D) perfect competition.
A) monopoly.
The existence of a buyer with significant buying power in an industry would make a tacit agreement: A) more difficult to achieve. B) easier to achieve. C) have no effect on tacit agreement negotiations. D) result in a kinked demand curve.
A) more difficult to achieve.
14. Rebecca knows that Becca Furniture's marginal cost curve is above the average total cost curve. This means Becca Furniture's average total cost curve: A) must be rising. B) must be flat. C) must be falling. D) may be rising, falling, or flat depending on other things.
A) must be rising.
Situations in which the more users of a product there are, the more useful the product becomes are called: A) network effects. B) monopolies. C) conglomerates. D) exclusive franchises.
A) network effects.
If the only two firms in an industry openly agree to fix the price at a given level, then this is an example of: A) overt collusion. B) price leadership. C) contestability. D) tacit collusion.
A) overt collusion.
When most cars sold in the United States were produced by the Big Three auto companies, General Motors would announce its prices for the new model year first and then the other companies would match it. This practice was an example of: A) price leadership. B) noncooperative behavior. C) a kinked demand model. D) a cartel.
A) price leadership.
A situation in which a player has an incentive to cheat regardless of what the other player does, and in which, if both players act in this manner, both players will be worse off, is referred to as: A) prisoners' dilemma. B) tit-for-tat strategy. C) price leadership model. D) kinked demand curve model.
A) prisoners' dilemma.
Price leadership occurs if: A) smaller firms in an industry silently agree to charge the same price as the largest firm. B) two or more firms in an industry agree to fix the price at a given level. C) competition among a large number of small firms generates a stable market price. D) competition among a large number of small firms generates similar, but slightly different, prices.
A) smaller firms in an industry silently agree to charge the same price as the largest firm.
Which of the following curves is not affected by the existence of diminishing returns? A) the average fixed cost curve B) the average variable cost curve C) the average total cost curve D) the marginal cost curve
A) the average fixed cost curve
9. Which of the following is most likely to be observed when firms engage mainly in non-price competition? A) actively encouraging the sale of generic, as opposed to brand-name, products B) advertising and product differentiation C) discounts offered through coupons D) low interest rates for financing the purchase of big-ticket items
B) advertising and product differentiation
The demand curve for a normal good will always slope downward because: A) the substitution effect and the income effect reinforce each other, and the substitution effect always displays an inverse relation between price and quantity demanded. B) the substitution effect and the income effect reinforce each other, and the income effect always displays an inverse relation between price and quantity demanded. C) even though the substitution effect and the income effect move in opposite directions, the substitution effect dominates, and it always displays an inverse relation between price and quantity demanded. D) even though the substitution effect and the income effect move in opposite directions, the income effect dominates, and it always displays an inverse relation between price and quantity demanded.
A) the substitution effect and the income effect reinforce each other, and the substitution effect always displays an inverse relation between price and quantity demanded.
(Figure: Payoff Matrix for Gehrig and Gabriel) The figure shows the payoff matrix for two producers, Gehrig and Gabriel, who sell handmade Davy Crockett figurines in San Antonio. Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month. If both follow a tit-for-tat strategy, equilibrium will be reached when: A) they each produce 5,000 figurines. B) they each produce 7,000 figurines. C) Gehrig produces 7,000 figurines and Gabriel produces 5,000 figurines. D) Gehrig produces 5,000 figurines and Gabriel produces 7,000 figurines.
A) they each produce 5,000 figurines.
Suppose that a profit-maximizing monopoly firm experiences a substantial technological change that reduces its marginal and average total costs by $40. If in response to its reduction in cost the firm changes its price in a profit-maximizing way, then we can predict that its total output will: A. rise. B. fall. C. remain unchanged. D. It is not possible to make a determination from the information given. A
A. rise
(Table: Utility from Milk and Honey) Moses' marginal utilities for milk and honey are given in the table below. The price of milk is $2 and the price of honey is $4. If Max's income is $16, how much milk and how much honey does he buy to maximize his utility? A) 1 milk and 1 honey B) 4 milks and 2 honeys C) 5 milks and 4 honeys D) 6 milks and 0 honeys
B) 4 milks and 2 honeys
3. In perfectly competitive long-run equilibrium: A) all firms make positive economic profits. B) all firms produce at the minimum point of their average total cost curves. C) the industry supply curve must be upward sloping. D) all firms face the same price, but the value of marginal cost will vary directly with firm size.
B) all firms produce at the minimum point of their average total cost curves.
10. Attempts by the federal government to prevent the exercise of monopoly power in the United States are called ________ policy. A) stabilization B) antitrust C) fiscal D) government
B) antitrust
Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month. Cindy's monthly totals fixed cost are $500, and her monthly total variable costs are $2,500. If for some reason Cindy's fixed cost fell to $400, then her: A) average fixed costs would increase. B) average total costs would decrease. C) marginal costs would decrease. D) average variable costs would decrease.
B) average total costs would decrease.
(Figure: Payoff Matrix I for Blue Spring and Purple Rain) The figure shows the payoff matrix for two producers of bottled water, Blue Spring and Purple Rain. The Nash equilibrium in the figure is reached when: A) both firms charge a high price. B) both firms charge a low price. C) Blue Spring charges a high price and Purple Rain charges a low price. D) Purple Rain charges a high price and Blue Spring charges a low price.
B) both firms charge a low price.
If the government only allowed one airline to serve the entire U.S. market, there would be a ________ loss associated with ________ efficiency in the airline industry. A) marginal; reduced B) deadweight; reduced C) total; increased D) deadweight; increased
B) deadweight; reduced
10. Because tourist demand for airline flights is relatively ________, small ________ in price will result in relatively ________ in additional tourists. A) inelastic; reductions; small increases B) elastic; reductions; large increases C) inelastic; increases; small decreases D) elastic; increases; small increases
B) elastic; reductions; large increases
Suppose that the Yankee Company is a profit-maximizing firm that has a monopoly in the production of baseball caps. The firm sells its baseball caps for $25 each. For this information, we can assume that the Yankee Company is producing a level of output at which: A) marginal revenue equals $25. B) marginal cost equals marginal revenue. C) average total cost equals $25. D) average total cost is greater than $25.
B) marginal cost equals marginal revenue.
The largest HHI possible is in the case of ________ and the index is ________ . A) monopoly; 10 B) monopoly; 10,000 C) monopoly; 100,000 D) oligopoly; 100,000
B) monopoly; 10,000
11. The demand curve for a perfectly competitive firm is: A) perfectly inelastic. B) perfectly elastic. C) downward sloping. D) relatively but not perfectly elastic.
B) perfectly elastic
17. A wheat farmer operating in the short run produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and (total) fixed costs are equal to $100. Then: A) average fixed cost is equal to $1.50. B) profit per bushel is equal to $2.75. C) average variable cost is equal to $1.25. D) economic profit is equal to $250.
B) profit per bushel is equal to $2.75.
If a local California avocado stand operates in a perfectly competitive market, that stand owner will be a price: A) maker. B) taker. C) discriminator. D) maximizer.
B) taker
When Aishe's Bar-B-Que produces 10 pork sandwiches, the total cost is $5.00. When 11 pork sandwiches are produced, the total cost rises to $6.00. From this we know that: A) the marginal cost of the 11th pork sandwich is equal to the average cost of 11 pork sandwiches. B) the marginal cost of the 11th pork sandwich is greater than the average cost of 11 pork sandwiches. C) the marginal cost of the 11th pork sandwich is less than the average cost of 11 pork sandwiches. D) we do not have enough information to compare the marginal cost to the average cost.
B) the marginal cost of the 11th pork sandwich is greater than the average cost of 11 pork sandwiches.
(Figure: Marginal Product of Labor) Using the marginal product of labor curve in the accompanying figure, the total product of labor for 8 workers is: A) 40 bushels. B) 35 bushels C) 96 bushels. D) 75 bushels.
C) 96 bushels.
10 (Figure: The Budget Line) For months now, Agnes has had $20 per month to spend on tea and scones. The price of a cup of tea and the price of a scone have been each $1. Which of the charts in the accompanying figure shows what will happen to her budget line if her income decreases to $10? A) Chart A B) Chart B C) Chart C D) Chart D
C) Chart C
4. Suzy knows she has maximized her utility, because she is on her budget constraint and: A) consumption of good X equals consumption of good Y. B) what is spent on good X equals what is spent on good Y. C) MUx/Px = MUy/Py. D) MUx = MUy.
C) MUx/Px = MUy/Py.
(Figure: Computing Monopoly Profit) The profit-maximizing price is ________ and will generate total economic profit of ________. A) P2; EF B) P3; the rectangle P1P2FG C) P3; the rectangle P2P3EF D) P3; EF
C) P3; the rectangle P2P3EF
(Figure: Monopolist) If this monopolist attempts to profit-maximize, it will produce: A) Q1 units and sell them at P1. B) Q2 units and sell them at P4. C) Q2 units and sell them at P2. D) Q3 units and sell them at P3.
C) Q2 units and sell them at P2.
(Figure: Monopolist) If this monopolist were forced to act like a perfect competitor, it would produce: A) Q1 units and sell it at P1. B) Q2 units and sell it at P2. C) Q3 units and sell it at P3. D) Q2 units and sell it at P4.
C) Q3 units and sell it at P3.
The pricing in monopoly prevents some mutually beneficial trades from taking place. The value of these unrealized mutually beneficial trades is called: A) sunk costs. B) opportunity costs. C) a deadweight loss. D) inequities.
C) a deadweight loss.
If all firms in an industry are price-takers, then: A) each firm can take the price that it wants to charge and sell at this price, provided it is not too different from the prices other firms are charging. B) each firm takes the market price as given for its current output level, recognizing that the price will change if it alters its output significantly. C) an individual firm cannot alter the market price even if it doubles its output. D) the market sets the price, and each firm can take it or leave it (by setting a different price).
C) an individual firm cannot alter the market price even if it doubles its output.
The HHI for ________ where ________ have (has) ________ of the market is ________ . A) monopolistic competition; four firms each; 25%; 10,000 B) oligopoly; three firms each; 50%; 5,000 C) oligopoly; two firms each; 50%; 5,000 D) monopoly; one firm; 100%; 100,000
C) oligopoly; two firms each; 50%; 5,000
According to the kinked demand model of oligopolies, oligopolistic firms often choose not to compete much on: A) advertising. B) quantity. C) price. D) product differentiation.
C) price
15. A perfectly competitive firm operating in the short run producing 100 units of output has ATC = $6 and AFC = $2. The market price is $3 and is equal to MC. In order to maximize profits (or minimize losses), this firm should: A) increase output. B) reduce output, but continue to produce a positive amount of output. C) shut down. D) do nothing; the firm is already maximizing profits.
C) shut down
16. If price is consistently below average variable cost, then in the short run a perfectly competitive firm should: A) raise price. B) sell more output. C) shut down. D) lower price to sell more.
C) shut down.
1. In the short run: A) all inputs are fixed. B) all inputs are variable. C) some inputs are fixed and some inputs are variable. D) all costs are variable.
C) some inputs are fixed and some inputs are variable.
A monopoly is a market structure characterized by: A) a single buyer and several sellers. B) a product with many close substitutes. C) a large number of small firms. D) barriers to entry and exit.
D) barriers to entry and exit.
6. When marginal cost is rising: A) average variable cost must be rising. B) average total cost must be rising. C) both a and b must hold. D) both average variable cost and average total cost may be rising or falling.
D) both average variable cost and average total cost may be rising or falling.
If a monopolist is producing a quantity that generates MC = P, then profit: A) is maximized. B) is maximized only if MR = P. C) can be increased by increasing production. D) can be increased by decreasing production.
D) can be increased by decreasing production
(Figure: Marginal Revenue, Costs, and Profits) In the accompanying figure, if market price decreases to $16, marginal revenue ______ and profit-maximizing output ______. A) increases; decreases B) increases; increases C) decreases; increases D) decreases; decreases
D) decreases; decreases
Unwritten or unspoken understandings through which firms collude to restrict competition are called: A) cartelization. B) oligopolization. C) overt collusion. D) tacit collusion.
D) tacit collusion.
A monopoly can be temporary because of: A) high barriers to entry. B) a lack of substitutes for the monopolist's product. C) economies of scale. D) technological change.
D) technological change.
The break-even price for a perfectly competitive firm is equal to: A) the minimum value of average variable cost. B) the marginal revenue, provided that marginal revenue is equal to marginal cost. C) the average fixed cost at the output level at which the firm is producing. D) the minimum value of average total cost.
D) the minimum value of average total cost.
An individual gets 5 units of utility from 1 slice of pizza and 9 units of utility from 2 slices of pizza. The principle of diminishing marginal utility implies that the total utility from 3 slices of pizza will be: exactly 12 units of utility. less than 13 units of utility. less than 9 units of utility. more than 12 units of utility.
less than 13 units of utility.