Adam Smith’s diamond-water puzzle
A. can be resolved by distinguishing between marginal and total utility.
B. occurs because diamonds have no utility.
C. occurs because scarcity increases total utility.
D. will likely never be resolved with existing economic tools.
Answer: A
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The United States has an absolute advantage in producing sugar over all of the other sugar producing countries. Does this fact mean that we should not import any sugar from the other countries?
What will be an ideal response?
The Federal Funds Rate is ________
A) the rate charged on overnight loans between banks B) the rate charged on corporate bank loans to healthy "prime" borrowers C) the rate charged on U.S. Treasury bonds by the Federal Reserve D) the rate charged on U.S securities with maturities of less than a year E) none of the above
Altruism describes:
A. a motive for action in which a person's utility is unaffected when another's utility increases. B. a motive for action in which a person's utility is decreased when another's utility increases. C. a motive for action in which a person's utility is increased when another's utility increases. D. a motive for action in which a person's utility becomes negative when another's utility increases.
Larger quantities of any good will be supplied at higher prices because
a. consumers will be more satisfied b. higher prices attract resources from other uses c. people are naturally lazy and have to be bribed to give up their leisure d. price and quantity supplied are inversely related e. of the law of decreasing opportunity cost