If Bob has one piece of gum in his mouth, he gains a utility of 12. If he adds a second piece to the first, it yields a marginal utility of 6; adding a third will bring marginal utility of 1. Adding a fourth piece will make Bob choke, yielding a marginal utility of 4. We can say:
A. Bob's total utility from chewing four pieces of gum would be 23.
B. Bob's total utility will decrease if he chews the fourth piece of gum.
C. Bob's total utility will be maximized if he eats two pieces.
D. Bob's total utility decreases after the first piece of gum.
B. Bob's total utility will decrease if he chews the fourth piece of gum.
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Investors are often willing to take the risks associated with investing in capital goods in developing nations because developing nations
A) insure a small return on investment. B) always insure the investments. C) have a large portion of the world's unutilized or underutilized resources and hence profit potential. D) get the International Monetary Fund (IMF) to back investments through a series of loan guarantees.
According to the U.S. Secret Service, approximately $2.6 billion of U.S. paper currency in circulation is counterfeit. Undetected counterfeit U.S. currency being held by the public both at home and abroad will impact the level of
A) M1. B) the money multiplier. C) the reserve ratio. D) commodity money.
Which statement below is the best summary of the economic point of view?
A) Society is created and designed by the government. B) Society is controlled by major business conglomerates. C) Society is an unintended outcome of individuals pursuing their own projects. D) All of the above. E) None of the above.
Which of the following activities increases the demand for union labor?
A) a decrease in the minimum wage B) a decrease in immigration C) an increase in the union wage D) an increased desire by consumers to buy imports