What is the difference between marginal utility and total utility?
Psychologist have found that with the same cereal in each box people would prefer to buy the red box. Psychologist think that this shows people act irrationally when making purchasing decisions. Would an economist agree that preference for red boxes is irrational? Why?
Congress is proposing a 10 cent tax on gasoline. He plans to compensate individuals for the tax by giving everybody a tax rebate equal to the increase in the amount they would have to pay for gasoline given their current consumption. An economist Greg Mankiw states that because people will be compensated for the price increase their purchase choices will not change? Is he right?