Which of the following correctly distinguishes the concepts of marginal utility and total utility?
a. Marginal utility is inversely related to the number of goods consumed, while total utility is directly related to the number of goods consumed.
b. Marginal utility is directly related to the number of goods consumed, while total utility is inversely related to the number of goods consumed.
c. Marginal utility is the total satisfaction provided by the consumption of a good, while total utility is the additional amount of satisfaction received from the consumption of an additional unit of a good.
d. Total utility is always a positive value, while marginal utility is always a negative value.
a
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An open-market purchase of government securities by the Fed will:
A. increase bank reserves, and the money supply will increase. B. increase bank reserves, and the money supply will decrease. C. decrease bank reserves, and the money supply will decrease. D. decrease bank reserves, and the money supply will increase.
In the long run, a tax placed on a perfectly competitive industry should
A. increase the number of firms. B. not affect the number of firms. C. decrease the number of firms. D. One cannot tell
A decrease in the price a firm receives for its output will lead the firm to:
A. expand output. B. reduce output. C. cut its payments to its factors of production. D. leave output unchanged.
If real salaries decrease but nominal salaries do not, this means that:
A. the purchasing power of money has increased. B. prices have not changed. C. prices have risen. D. prices have fallen.