When Pepsi becomes more expensive relative to other beverages, people will purchase less Pepsi. This observation is known as the:
A. diamond-water paradox.
B. law of diminishing marginal utility.
C. substitution effect.
D. income effect.
Answer: C
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One would expect to observe a diminishing marginal product of labor when crowded office space reduces the productivity of new workers
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. The shape of a demand curve is ultimately determined by the underlying choices about maximizing utility subject to a budget constraint. 2. For someone to determine the labor-leisure choice that will maximize her utility, she must place numerical values on the total and marginal utility that she would receive from every level of income and leisure. 3. The United States has higher rates of domestic savings as a percentage of gross domestic product than do China and Russia. 4. Even though a business pays income taxes based on its accounting profit, whether it is economically successful depends on its economic profit.
To improve its standard of living, a nation's economy must
(A) Let the government make economic decisions. (B) Reach economic equality. (C) Grow through innovation. (D) Remain stable.
"To find the economy's marginal social benefit curve for a public good, we sum the individual marginal benefit curves horizontally." True or false? Explain
What will be an ideal response?