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