Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
A. An increase in consumer income over this ten year period
B. A reduction in the price of residential phone service, a substitute for cellular phone service
C. An increase in the wages of workers in the cellular phone industry
D. Technological improvements that reduced the cost of supplying cellular phone service
Answer: D
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A) they increase in value more slowly than does money. B) they have a lower overall return than money. C) they are more vulnerable to losing their real value as inflation increases. D) they generate transactions costs when they are exchanged for money.
The law of diminishing marginal utility indicates that the slope of the marginal utility curve eventually becomes:
a. negative b. vertical c. horizontal d. positive
Normative economic principles are concerned with how people ________ make decisions while positive economic principles are concerned with how people ________ make decisions.
A. do; should B. in ordinary life; in power C. in power; in ordinary life D. should; do
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A. $420,000. B. $100,000. C. $80,000. D. $2,100,000.