Katie has decided that she would enjoy eating another cupcake. Which of the following statements is consistent with Katie's decision?
A. Katie's marginal utility has decreased but it is unclear what has happened to total utility.
B. Katie's total utility has increased but it is unclear what has happened to her marginal utility.
C. Katie's marginal utility has decreased with a corresponding decrease in total utility.
D. Katie's marginal and total utility remain unchanged.
Answer: B
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When planned autonomous spending rises, the planned expenditure line
A) makes a parallel shift downward. B) makes a parallel shift upward. C) pivots upward from the vertical intercept. D) pivots downward from the vertical intercept.
Paper money, such as the U.S. dollar, the Israeli shekel, or the euro, that is not backed by and is not convertible into any other good, is called
a. gold-exempt money b. specie money c. paper-valued money d. government-generated money e. fiat money
A form of government spending that is not made in exchange for a currently produced good or service is called
a. a transfer payment. b. consumption. c. investment. d. None of the above is correct.
Normative economics
A) is never studied at the undergraduate level. B) involves value judgments. C) is always objective. D) cannot be applied to all economic problems.