According to the law of diminishing marginal utility:
A. you should never consume more of something if your marginal utility is decreasing.
B. if your total utility is increasing as you consume more of something, then your marginal utility must be increasing as well.
C. as you consume less of something, your total utility will decrease.
D. as you consume less of something, your marginal utility from consuming that good will increase.
Answer: D
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A firm that can borrow from a bank any amount it wishes up to a certain limit, and at any time up to a certain date, is said to have a
A) repurchase agreement. B) trade credit. C) a line of credit. D) internal financing.
For an intertemporal budget constraint concerning saving for retirement, the choice is between past and future___________________.
a. salary b. consumption c. health d. working units
When the Fed decreases the money supply, interest rates
A. rise, causing velocity to fall. B. fall, causing velocity to fall. C. rise, causing velocity to rise. D. fall, causing velocity to rise.
Price floors and ceiling prices:
A. both cause shortages. B. both cause surpluses. C. cause the supply and demand curves to shift until equilibrium is established. D. interfere with the rationing function of prices.