Why are diamonds more expensive than water?
A) because the last glass of water has higher marginal utility than the last diamond
B) because the last diamond has higher marginal utility than the last glass of water
C) because you get more total utility from diamonds
D) because water is a necessity
Answer: B
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Complete this sentence: in a market system income is generally earned
A) independently of acts of exchange and production. B) arbitrarily and randomly. C) unproductively. D) in the process of its creation.
The term "present value" refers to the future value of present day money.
A. True B. False C. Uncertain
Which is not determined by supply and demand?
A. The wage rate B. The interest rate C. Rent D. Profits
Monetarists argue that the relationship between:
A. The quantity of money the public wants to hold and the level of GDP is not stable B. The quantity of money the public wants to hold and the level of GDP is stable C. The quantity of money the public wants to hold and the level of saving is stable D. Velocity and the interest rate varies directly