A rational person will NEVER consume a product when its
A) marginal utility is negative.
B) total utility is increasing at a decreasing rate.
C) marginal utility is decreasing.
D) total utility is decreasing at an increasing rate.
Answer: A
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Suppose aggregate demand is increasing over time. Would the modern Keynesian model assume that the price level would always be constant? Explain
What will be an ideal response?
Bobby is offered a job as a salesperson in which there is a 50 percent chance that he will make $2,000 and a 50 percent chance that he will make $10,000. Bobby's utility of wealth curve is shown in the figure above. What is Bobby's cost of risk?
A) $1,000 B) $2,000 C) $3,000 D) $4,000
The larger the proportion of income spent on a product, other things equal, the: a. more unit elastic is a consumer's demand
b. more elastic is a consumer's demand. c. more inelastic is a consumer's demand. d. more vertical is a consumer's demand curve.
Refer to Figure 34.1. Suppose the production possibilities curve PP2 represents the U.S. economy and point C represents the combination of goods and services currently being produced. If welfare discourages people from seeking work and welfare is currently in effect, the most likely result of eliminating welfare in the United States would be
A. A shift from PP2 to PP3. B. No change from PP2 or point C. C. A movement from point C to a point on PP2. D. A shift from PP2 to PP1.