Answer:
Consumption of good y should decrease
The Marginal Utility should also decrease
Explanation:
Marginal utility of a good is the added satisfaction that a consumer gets from consuming additional units of the good.
Given the two goods x and y, and MUx/Px > MUy/Py.
The Marginal Utility Price Ratio indicates the Utility/Satisfaction derived from the last Dollars spent.
To allocate a budget efficiently, the marginal utility for each item should be equal.
A good has a higher marginal utility-price ratio is the good that the consumer should consume more of.
If the Marginal Utility-Price ratio of good x is greater than that of good y, your consumption of good y should decrease and therefore, the MUy will also decrease.
Answer:
II. Prevention costs are costs that are incurred to prevent the sale and production of defective units.
Question Completion:
Matrix payoff:
Sharon
Left Right
Paolo Left 8, 3 4, 4
Right 5, 3 5, 4
Answer:
The only dominant strategy in this game is for ___Paolo______ to choose ____Right______.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Paolo chooses ____Right______ and Sharon chooses __ Right_____.
Explanation:
a) Paolo's dominant strategy is the strategy that always provides the greater utility to Paolo, no matter what Sharon's strategy is. In this case, the dominant strategy for Paolo is to choose RIGHT always.
b) The Nash Equilibrium concept determines the optimal solution in a non-cooperative game in which each player (e.g. Paolo and Sharon) lacks any incentive to change their initial strategies. This implies that each player can achieve their desired outcomes by not deviating from their initial strategies since each player's strategy is optimal when considering the decisions of the other player.
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