Answer the following statement true (T) or false (F)
1) If marginal utility is diminishing, total utility must also be declining.
2) Marginal utility is total utility divided by the number of units consumed.
3) When total utility is at a maximum, marginal utility is zero.
4) When a consumer shifts purchases from X to Y, the marginal utility of X falls and the marginal
utility of Y rises.
1) F
2) F
3) T
4) F
You might also like to view...
Which of the following is not a weakness of fiscal policy as a tool of economic stabilization? a. It is ineffective in dealing with stagflation
b. Its correct implementation depends on an accurate estimate of potential output. c. It is subject to lags. d. It affects only aggregate demand but does not have any impact on aggregate supply. e. Households may not respond to changes they perceive as permanent.
The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, no government transfer payments, taxes of $150 million merits, a budget surplus of $40 billion merits, and investment of $100 billion merits. What were its consumption and government expenditures on goods and services?
a. $460 million merits and $150 million merits b. $310 million merits and $190 million merits c. $350 million merits and $190 million merits d. $390 million merits and $110 million merits
The Security Market line (SML) shows how the average expected rates of return on assets vary with:
A. Stock price B. Dividend payment C. Risk level D. Time preference
The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour and there are no other variable costs, then what is the marginal cost (MC) per book of increasing book sales from 83 to 87 books per hour?
A) $6.00 B) $4.00 C) $2.07 D) $1.50