Tom is maximizing utility by buying three packs of bubble gum and four packages of Skittles. Given diminishing marginal utility, if the price of Skittles rises, the principle of rational choice tells us that Tom will buy:
A. more Skittles, raising the opportunity cost of not consuming Skittles.
B. fewer Skittles, lowering the opportunity cost of not consuming Skittles.
C. fewer Skittles, raising the opportunity cost of not consuming Skittles.
D. more Skittles, lowering the opportunity cost of not consuming Skittles.
Answer: C
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In early 2013, two economists debated the question of whether:
a. the trade deficit should be reduced rapidly or steadily b. the United States was past its prime c. the percentage of health care to GDP was a warning sign for the economy d. none of these
The time between implementation of a macro-policy change and when the change exerts its primary influence is called the
a. impact lag. b. recognition lag. c. administrative lag. d. tax reform lag.
Which statement is false?
A. The monopolist's demand and marginal revenue curves are two separate curves. B. The monopolist can sell more output only by lowering price. C. The monopolist produces at the minimum point of its ATC curve. D. None of these statements are false.
The law of diminishing marginal productivity implies that opportunity cost:
A. is constant as all inputs are increased to produce successive units of output. B. increases as all inputs are increased to produce successive units of output. C. increases as one input is increased to produce successive units of output. D. is constant as one input is increased to produce successive units of output.