The law of diminishing marginal utility implies that marginal utility never becomes negative.
Answer the following statement true (T) or false (F)
False
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Producing an amount of GDP equal to potential GDP is most consistent with the economy producing
A) either on or within the production possibilities frontier. B) on the production possibilities frontier. C) beyond the production possibilities frontier. D) either on or beyond the production possibilities frontier. E) within the production possibilities frontier.
A risk-preferring person is willing to pay
A) a risk premium. B) a fee to make a fair bet. C) to obtain decreasing marginal utility. D) None of the above.
Which of the following is an example of a normative economic statement?
a. The inflation rate in the United States decreased 4 percent because the price of energy fell. b. The economy grew at an annual rate of 5 percent during the first quarter of this year. c. If two automobile companies merge, the price of automobiles will rise. d. An increase in international trade benefits some workers but hurts others. e. The minimum wage should be increased so that low-income workers can afford to keep up with the cost of living.
A student entering college wants to assess the value of investing in human capital. To determine whether the investment will be profitable, she should compare the
a. value of her total expected future earnings with the total of her direct and indirect costs of college. b. present discounted value of future earnings with the total of her direct and indirect costs of her education. c. present discounted value of her additional future earnings as the result of the college education with the present discounted value of only her direct costs of college. d. present discounted value of her additional future earnings as the result of the college education with the present discounted value of her direct and indirect costs of college.