Which of the following examples best describes the Law of Diminishing Marginal Benefit?
A) If a seller of notebooks in a perfectly competitive market charges above the market price, his profit decreases.
B) With each additional pen Jill buys, her willingness to pay for another pen decreases.
C) Each additional unit of ice cream that John consumes gives him more and more satisfaction.
D) If the weather gets cold, the demand for ice cream will fall.
B
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Choices that are best for the society as a whole are choices in pursuit of
A) self-interest. B) answering the "how" question. C) answering the "for whom" question. D) the social interest. E) incentives.
The idea that poor people consume a higher percentage of their income than the rich is a logical conclusion drawn from
a. Keynes's absolute income hypothesis b. Duesenberry's relative income hypothesis c. Friedman's permanent income hypothesis d. the life-cycle hypothesis of consumption e. the consumption function
Perfect substitutes will have indifference curves that are:
a. concave b. convex c. straight lines d. L-shaped e. none of the above
The method of constructing a measure of technological progress relies on which of the following assumptions?
A) each factor of production is paid its marginal product B) population growth does not change C) population growth is zero D) the saving rate does note change