Utility theory assumes that marginal utility:
a. increases as an individual consumes more of a product.
b. decreases as an individual consumes more of a product.
c. is zero as long as the individual derives utility from the product.
d. is constant as long as the individual derives utility from the product.
e. is constant as long as the individual derives satisfaction from the product.
b
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John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. The expected value of John's earnings if he chooses to expand is:
A. $320,000 B. $230,000 C. $900,000 D. $140,000
You are an efficiency expert hired by a manufacturing firm that uses K and L as inputs. The firm produces and sells a given output. If w = $40, r = $100, MPL = 4, and MPK = 40 the firm:
A. should use more K and less L to cost minimize. B. is profit maximizing but not cost minimizing. C. is cost minimizing. D. should use less L and more K to cost minimize.
Economists observed the following growth rates in the fourth quarter of 1995: real GDP = 2.8 percent; M1 = 7.8 percent; GDP deflator = 2.2 percent. Given this data, the growth of velocity was approximately
A. ?7.8 percent. B. ?5.0 percent. C. ?2.8 percent. D. ?2.2 percent. E. ?2.0 percent.
The text maintains that competition exists in government
What will be an ideal response?