For Matthew, the marginal utility of the 9th soda in a day is positive and the marginal utility of the 10th soda in a day is zero. This
A. implies that Matthew maximizes utility by consuming 9 sodas per day.
B. is impossible because each additional unit of consumption of any good must provide positive marginal utility.
C. implies that Matthew's demand curve for sodas per day will become upward sloping at 10 sodas per day.
D. implies that at a zero price Matthew's demand curve will intersect the quantity axis at 10.
Answer: D
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Marginal social cost is equal to
A) the amount people who buy a product pay for another unit. B) whatever producers have to pay to produce output. C) the sum of marginal private cost and the marginal external cost. D) the average of marginal private cost and the marginal external cost. E) None of the above answers is correct.
The investment function implies that current output does not influence investment. Does that make sense?
What will be an ideal response?
In reality, firms may seek to maximize
a. sales. b. profits. c. market share. d. All of the above can be correct, depending upon management, owners, and other factors.
One of the reasons that expansionary monetary policy was not as effective as expected in recent years is that banks:
A. purchased Treasures with the reserves that the Fed added to their accounts. B. loaned reserves that the Fed added to banks. C. returned reserves that the Fed added to banks. D. held onto the reserves that the Fed added to banks.