Is "utility" another word for the cost we give up when we consume a good?
What will be an ideal response?
No, utility does not mean the opportunity cost of consuming a good. Utility is the benefit or satisfaction a person gets from consumption of a good or service.
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Cash may be preferred to food stamps because additional cash
A) rotates the budget constraint. B) shifts out the budget constraint at every point. C) provides a smaller opportunity set. D) allows the purchase of more food.
The price of an airline ticket from Denver to Chicago costs $300. A bus ticket costs $150. Traveling by plane takes 2 hours compared with 32 hours by bus. Other things constant, an individual would gain by choosing air travel if, and only if, his time were valued at more than Select one:
a. $2 per hour. b. $4.69 per hour. c. $5 per hour. d. $150 per hour.
Perfectly competitive markets are efficient because
A) they always reach equilibrium. B) firms in the market are price takers. C) the cost to society for producing the goods is exactly equal to the value that society places on the good. D) the long run equilibrium assures that the prices of resources will not increase.
A decrease in the money supply aimed at decreasing aggregate output is
A) an expansionary fiscal policy. B) a contractionary monetary policy. C) a contractionary fiscal policy. D) an expansionary monetary policy.