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Social Studies, 17.10.2020 21:01 blkj9978
Question 2:
The rules of politics are not always the same as the rules of economics. In discussions
of setting budgets for government agencies, there is a strategy called "closing the
Washington monument." When an agency faces the unwelcome prospect of a budget
cut, it may decide to close a high-visibility attraction enjoyed by many people like the
Washington monument). Explain in terms of diminishing marginal utility why the
Washington monument strategy is so misleading.
Hint : If you are really trying to make the best of a budget cut, should you cut the items in your
budget with the highest marginal utility or the lowest marginal utility? Does the Washington
monument strategy cut the items with the highest marginal utility or the lowest marginal utility
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