As an individual consumes more of a particular good, the total level of utility derived from that consumption usually
A. increases at a decreasing rate.
B. increases at an increasing rate.
C. increases at a constant rate.
D. decreases at an increasing rate.
Answer: A
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When the market for gasoline in Motorland is in equilibrium, the deadweight loss is
A) $37,500 per month. B) $150,000 per month. C) $75,000 per month. D) zero.
Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because
A) some individuals in both countries may be made worse off because of trade. B) trade restrictions are likely to be imposed as trade grows over time. C) they do not account for the reduction in wages that occurs in both countries as a result of trade. D) in the real world, rich countries can take advantage of poor countries.
According to Ricardian Equivalence, consumers may not respond to a tax cut ________
A) if that tax cut is directed solely at upper income groups B) if that tax cut is directed solely at lower income groups C) since they understand a tax cut today will lead to a tax increase in the future D) if they lack patriotic fervor
Social welfare is
a. a government program through which society takes care of low-income people b. the overall well-being of people in the economy c. measured by spending on party supplies, restaurant meals, and movie tickets d. applies to sociology, not economics e. All the answers are correct.