As more Big Macs are consumed each day, the marginal utility that a person gets from each additional Big Mac:
A. rises at a steady rate.
B. decreases.
C. remains constant.
D. accelerates.
Answer: B
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Monopolistic competition is a market in which ________ firms produce ________ goods and services
A) many; identical B) many; differentiated C) few; differentiated D) few; identical
Without price discrimination, a firm
A) faces a tradeoff when pricing a good that has customers with different willingness to pay. B) cannot maximize profit. C) has no market power. D) does not get any producer surplus, with all of the surplus going to consumers.
Using Figure 1 below, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P1 and Y1.
D. P4 and Y2.
A situation in which the Fed's target interest rate has fallen as far as it can fall is sometimes described as a
a. liquidity preference. b. liquidity trap. c. open-market trap. d. interest-rate contraction.