If the marginal benefit Isaac derives from the consumption of another candy bar is greater than the price of the candy bar, then:
a. Isaac will not purchase any more candy bars
b. Isaac will increase his total satisfaction by purchasing the candy bar.
c. the opportunity cost of the candy bar is less than the price.
d. Isaac's total utility will diminish if he purchases the candy bar.
b
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Refer to Supply and Demand. Deadweight loss
The following questions refer to the accompanying graph, which shows the supply and demand for military service where Q0 represents the quantity provided by a volunteer army and Qd the quantity provided by a draft.
a. is eliminated by a limited draft.
b. occurs only with a volunteer army.
c. occurs only with a draft.
d. Occurs with both a volunteer army and with a draft.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
What is purchasing power parity? Why might it not hold?
What will be an ideal response?
All of the following, except one, would increase the demand for a particular model of a Ford automobile. Assume that this model is a normal good. Which is the exception?
a. an increase in buyers' incomes b. increased prices of other Ford models c. an expected future increase in the price d. an increase in the U.S. population e. a decrease in the price of steel