Refer to the above table. Dave's utility schedule is characterized by
A. constant total utility.
B. diminishing marginal utility.
C. increasing marginal utility.
D. constant marginal utility.
Answer: C
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The Friedman-Savage utility function can explain why
A) people buy automobile insurance. B) somebody becomes addicted to gambling. C) people become more risk averse as their wealth increases. D) people place small bets to have a chance at winning a large amount.
If a monopolist is producing at a point at which marginal revenue is greater than marginal cost, then it should:
a. continue producing at the current level. b. raise its prices. c. lower its prices. d. increase the level of production. e. decrease the level of production.
If a policy is Pareto optimal:
A. it will hurt no one. B. some of the losses will exceed the gains. C. it will hurt more than 50 percent of the population. D. it will hurt less than 50 percent of the population.
Economic theory looks at social coordination as a process of
A) continuing mutual adjustments to the situations created by the actions of others.
B) continuous adjustment of extremes to conform to the average.
C) passing information up from below and instructions or commands down from above.
D) sacrificing personal interest to the public or general interest.
E) sacrificing the public interest to self-interest.