Generally speaking, as more of a particular good is purchased, a consumer's marginal utility ____ and total utility ____
a. increases; decreases
b. decreases; increases
c. increases; increases
d. decreases; decreases
e. generalizations cannot be made
b
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If inflation does not adjust rapidly in the short run, then when the Federal Reserve decreases the nominal interest rate, the real interest rate in the short run will ________.
A. be determined by saving and investment decisions. B. decrease C. increase D. not change
In the long run in a monopolistic competitive industry,
a. economic profits will be positive. b. price will be driven to zero. c. the firm will not operate where MR = MC. d. economic profit will be zero. e. price will exceed average cost.
Imagine that someone offers you $X today or $1,500 in 5 years. If the interest rate is 4 percent, then you would prefer to take the $X today if and only if
a. X > 1,055.56. b. X > 1,120.89. c. X > 1,232.89. d. X > 1,338.26.
In which case below does a person's purchasing power from saving increase the most?
a. the nominal interest rate = 10% and inflation = 8% b. the nominal interest rate = 9% and inflation = 6% c. the nominal interest rate = 8% and inflation = 4% d. the nominal interest rate = 7% and inflation = 2%