A rational consumer should not consume more of a good when:
A. total utility is decreasing.
B. marginal utility is diminishing.
C. the price is high.
D. income is decreasing.
Answer: A
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Which of the following is an accurate statement about an increasing-cost industry?
a. Input prices stay the same as an industry uses a large portion of the input. b. Input prices stay the same as an industry uses a small portion of the input. c. Input prices rise as an industry uses a large portion of the input. d. Input prices drop as an industry uses a large portion of the input
Changes in the growth rate of potential output and deviations of actual output from potential output are two logical explanations for:
A. increasing wage inequality. B. short-term economic fluctuations. C. the decline in the natural rate of unemployment. D. skill-biased technological change.
According to the bounded rationality hypothesis, an individual confronting a large number of complicated choices is most likely to respond by
A) using a simple rule of thumb to choose among a subset of easiest-to-evaluate options. B) using the ceteris paribus assumption to assist in simplifying and examining each of the possible options. C) utilizing readily available empirical evidence to assist in evaluating every option. D) assessing every available choice by developing sophisticated theories regarding each option.
Perfect price discrimination would eliminate consumer _________________.
Fill in the blank(s) with the appropriate word(s).