Suppose the law of diminishing marginal utility holds for coffee. As a person drinks more coffee during the day, the total utility he or she receives will:
A. increase faster and faster.
B. fall steadily.
C. remain constant.
D. rise, but at slower and slower rates.
Answer: D
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When less than the efficient amount of a good is produced, how does the marginal benefit of the last unit produced compare to its marginal cost?
What will be an ideal response?
When we hear on the news, "The Fed has lowered interest rates today," the Fed has most likely
A) raised the discount rate. B) lowered the required reserve ratio. C) raised the federal funds rate. D) purchased government bonds.
Which of the following is likely to have the most price elastic demand?
a. fountain ink pens b. milk c. disposable diapers d. shampoo
The table below shows how the marginal benefit of car washes varies for Carol with the number purchased per month.Car washes per monthMarginal benefit of purchasing an additional car wash1$6.002$5.003$4.004$3.005$2.00The price of each car wash is reduced from $2.99 to $1.99. Assuming that the price of a car wash accurately reflects the marginal cost to Carol and that she is rational, she will increase the number of car washes purchased per month from:
A. one to two. B. two to three. C. three to four. D. four to five.