Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.

-In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?
A)The marginal utility from employment dollars is greater than that from investment dollars.
B)The marginal utility from employment dollars is less than that from investment dollars.
C)The consumer surplus derived from employment income is greater than that from investment income.
D)The consumer surplus derived from employment income is smaller than that from investment income.

Question

Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
 
-In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?
A)The marginal utility from employment dollars is greater than that from investment dollars. 
B)The marginal utility from employment dollars is less than that from investment dollars. 
C)The consumer surplus derived from employment income is greater than that from investment income. 
D)The consumer surplus derived from employment income is smaller than that from investment income.

Quizplus · Accepted Answer

The marginal utility from employment dollars is often considered greater than that from investment dollars because the income earned from employment is typically relied upon for daily living expenses and necessities, making each additional dollar earned from work more valuable or having a higher utility to the earner compared to investment income, which is often seen as supplemental.

Maria Is Considering Her Lunch Purchase