If you talk to people who are addicted to alcohol, they will tell you that the more they consume, the more they long for and value the next drink. If you think about their sorry predicament in terms of utility analysis, you can conclude about their consumption of alcohol that
a. utility theory does not apply to alcohol
b. total utility keeps decreasing as more is consumed
c. marginal utility keeps increasing as more is consumed
d. the law of diminishing marginal utility is present here
e. total and marginal utility keep increasing as more is consumed, but total utility is always greater than marginal utility
C
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The figure above shows the market for tires. The government has imposed a tax on tires, and the sellers pay ________ of the tax
A) $10 B) $20 C) $50 D) $60 E) $30
The wealthiest 10 percent of the population owns about
A) 30 percent of all the wealth in the United States. B) 50 percent of all the wealth in the United States. C) 70 percent of all the wealth in the United States. D) 90 percent of all the wealth in the United States.
Which of the following is NOT included in the M1 money supply?
A. checkable and debitable accounts B. currency C. passbook savings accounts D. traveler's checks
If the stock market booms and people feel wealthier (in a closed economy), then the real interest rate ________ and investment ________.
A. rises; declines B. falls; declines C. rises; increases D. falls; increases