Marginal utility is measured as
A) utility per unit of production.
B) additional output divided by additional utility.
C) output of a good or service divided by price.
D) additional utility from each additional good consumed.
Answer: D
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A recession is a period of time in which the total output of the economy rises.
Answer the following statement true (T) or false (F)
The excess capacity theorem implies that
a. consumers would be better off if some monopolistically competitive firms left their markets. b. consumers would be better off with more standardization of products. c. monopolistic competition benefits society by eliminating excess capacity in production. d. monopolistic competition wastes some of society's resources but the elimination of this waste does not necessarily benefit consumers.
Refer to the diagram for a pure monopolist. If a regulatory commission sets the price to achieve the socially optimal allocation of resources, it will have to:
A. tax the monopolist P 3 P 1 per unit to prevent the monopolist from realizing an economic
profit.
B. subsidize the monopolist or the monopolist will go bankrupt in the long run.
C. subsidize the monopolist P 1 P 4 per unit to allow the monopolist to break even.
D. tax the monopolist P 1 P 2 per unit to prevent the monopolist from realizing an economic
profit.
A researcher claims that the standards of law and order are the basis of the economic prosperity of a certain country. This argument is based on the:
A) geography hypothesis. B) location hypothesis. C) culture hypothesis. D) institutions hypothesis.