Suppose you have spent your entire budget and, for all the goods you purchase, the marginal utilities per dollar spent are identical. Which of the following is true?
a. You are being irrational.
b. You can increase your utility by reallocating your income.
c. You will reduce your utility if you allocate income in any other way.
d. You are minimizing your marginal utility.
e. You can avoid diminishing marginal utility.
C
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You have a bond that pays $18 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?
A) The likelihood that the firm issuing your bond will default on debt decreases. B) Coupon payments on newly-issued bonds rise to $22 per year. C) The price of a share of stock in the company rises. D) Coupon payments on newly-issued bonds fall to $15 per year.
If a monopoly's demand curve shifts to the right, the monopoly
A) will charge a higher price. B) will charge a lower price. C) will sell more. D) decision cannot be determined.
A monopolist faces the trade-off that a higher price leads to a lower quantity demanded. This means that the monopolist faces a(an):
a. downward-sloping demand curve. b. upward- sloping demand curve c. horizontal demand curve. d. vertical demand curve.
Transfer payments are government grants, subsidies, or gifts to individuals or firms.
What will be an ideal response?