Suppose that for Alicia the marginal benefit (MB)of producing is $75 and that the marginal cost (MC)of producing is $5.Suppose also that her marginal benefit of stealing is $85 and the marginal cost of stealing is $5.Is Alicia currently maximizing utility in terms of producing and stealing? If not,should she produce more and steal less,or produce less and steal more to move toward utility maximization?

Question

Quizplus · Accepted Answer

Alicia is not maximizing utility because the marginal benefit per cost of stealing ($85/$5 = 17) is higher than that of producing ($75/$5 = 15). Therefore, to move toward utility maximization, she should steal more and produce less.

Suppose That for Alicia the Marginal Benefit (MB)of Producing Is