Children who dislike Brussels sprouts exemplify the notion that the marginal utility of Brussels sprouts is:
A. Zero
B. Negative
C. Positive, but decreasing
D. Less than the total utility
B. Negative
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Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The table below shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms CleanedPer Hour Meals CookedPer HourLou54Alex33If Alex and Lou work out an efficient arrangement for these two chores, then under that arrangement:
A. Lou would do all of the cleaning and all of the cooking. B. Alex would do all of the cleaning, while Lou would do all the cooking. C. Alex and Lou each would do half of the cooking and half of the cleaning. D. Lou would do all of the cleaning, while Alex would do all of the cooking.
Collusion is more likely to occur when
A) there is fear of punishment for not colluding. B) there is a known finite time horizon. C) there are large gains to be made by cheating on an agreement. D) the game lasts only one period.
Suppose the nominal interest rate this year is 6.5% and that the economy experiences 2.3% deflation. What is the real interest rate?
Division of labor
A) increases the amount of capital in the economy. B) leads to an increase in the amount of output in the economy. C) makes economic goods possible. D) is not possible for service goods.