The principle of diminishing marginal utility implies that total utility falls as consumption rises above a certain level
a. True
b. False
B
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With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then normative analysis would conclude that:
A. the policy was effective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
B. the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
C. the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D. there is no "right" conclusion to be reached (in a normative sense), since people have different opinions concerning what constitutes a better outcome.
Primary credit extended by the Fed is:
A. the highest interest rate loans offered by the Fed. B. loans offered at the prime interest rate for periods exceeding thirty days but less than one year. C. for banks needing long-term loans to work out financial problems. D. short-term, usually overnight loans.
When dealing with present value, a higher interest rate:
A. does not affect the present value of the future amount. B. decreases the present value of a future amount. C. increases the present value of a future amount. D. None of the statements associated with this question are correct.
Income elasticity of demand measures how ____________________.
A. responsive the quantity of one good demanded to a change in the price of another good B. the consumption of various goods and services respond to change in income C. the quantity demanded responds to a change in price D. responsive the quantity supplied is to a change in price