Despite the fact that water is necessary to sustain life, it is less expensive than milk. Economic theory suggests that this is so because
A) there is a conspiracy among milk producers to hold prices artificially high.
B) although the total utility of water consumption is high, its marginal utility per dollar spent is low when compared to milk.
C) consumers are irrational.
D) sellers of water hold the price of water artificially low because of its importance.
Answer: B
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The present value of a given payment in the future ________ when the interest rates fall
A) decreases B) reverts to the original value C) increases D) remains the same
The firm in the figure above has a total cost equal to ________
A) $5.10 × 10 B) $8.00 × 10 C) ($5.10 - $8.00 ) × 10 D) ($8.00 - $5.10 ) × 10 E) None of the above answers is correct because more information is needed.
Refer to the scenario above. If they are the only bidders in the auction, Jeff will win the auction if ________
A) Tom and Roger bid up to their value for the good while Bill and Jeff bid below their value of the good B) Tom and Jeff bid up to their value for the good while Roger and Bill bid below their value for the good C) Bill and Jeff bid up to their value for the good while Tom and Roger stop bidding at $100 and $200, respectively D) each of them bids up to his value for the good
Refer to the information provided in Figure 13.4 below to answer the question(s) that follow. 
Figure 13.4Refer to Figure 13.4. At its production point, the ________ for this firm is $11.
A. marginal revenue B. profit-maximizing price C. marginal cost D. average total cost