The law of diminishing marginal utility implies that as a household consumes more of a product, its total utility will increase by smaller amounts, assuming marginal utility remains positive.
Answer the following statement true (T) or false (F)
True
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The benefit estimation method employed by Carson and Mitchell in their analysis of the Clean Water Act was
a. the travel cost method (TCM) b. the contingent valuation method (CVM) c. the averting expenditure method (AEM) d. the hedonic price method (HPM)
According to the law of demand, a demand curve
A. Has a positive slope. B. Has a negative slope. C. Exceeds the economy's ability to produce. D. Is a horizontal or flat line.
You like bundle A better than bundle B, and bundle C is an average between A and B. If your tastes satisfy convexity, then C is at least as good as A and as B.
Answer the following statement true (T) or false (F)
In a cartel, participating members can cheat by
A. letting more entrants join the cartel. B. producing a lower production level than the cartel quota. C. leaving the industry. D. charging a slightly lower price and raising production.