Have you ever gone to an auction? You see people bidding against each other for a good, such as an oil painting. As the bidding price inches upward, people drop out of the bidding process. Why? Because for the people dropping out, the
a. ratio of marginal utility to price of the good increases beyond the ratio of other goods
b. marginal utility per dollar of the good increases beyond the marginal utility per dollar of other goods
c. marginal utility per dollar of the good decreases below the marginal utility per dollar of other goods
d. marginal utility of the good falls to zero
e. ratio of marginal utility to price of the good falls to zero
C
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A consequence of hyperinflation is that people
A) increase the quantity of money demanded. B) receive higher real wage hikes, which increases their purchasing power for goods and services. C) who make fixed-payment loans to others receive higher payments as inflation increases. D) spend time trying to keep their money holdings near zero. E) want to lend funds because interest rates are so high.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S1 (point A)
If there is an increase in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change? A) The equilibrium point will move from A to B. B) The equilibrium point will move from A to C. C) The equilibrium point will move from A to E. D) There will be no change in the equilibrium point.
If Fred's marginal utility of pizza equals 10 and his marginal utility of salad equals 2, then
A) he would give up 5 pizzas to get the next salad. B) he would give up 5 salads to get the next pizza. C) he will eat five times as much pizza as salad. D) he will eat five times as much salad as pizza.
One market that fits the characteristics of monopolistic competition is
A. women’s clothing. B. wheat farming. C. television networks. D. electric power generation.