Which of the following is correct?
A. There is no firm mathematical relationship between marginal utility and total utility.
B. Total utility is equal to the change in marginal utility from consuming an additional unit of a
product.
C. If marginal utility is diminishing and is a positive amount, total utility will increase.
D. If marginal utility is diminishing, total utility must also be diminishing.
Answer: C
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Ensuring that high-quality public education is freely available to all children is one of the most important ways that a country can:
A. increase its stock of human capital. B. decrease its stock of human capital. C. decrease its productivity. D. increase its foreign direct investment.
The existence of an inflationary gap would tend to benefit most
A. bankers. B. retired persons. C. unemployed workers. D. stock owners.
An example of a beneficial externality is
A. a vaccination to prevent a communicable disease. B. loud music from a cool house party. C. a sandwich shop that adds a free pickle with each order. D. a pasture that all ranchers can freely graze their cattle on.
Figure 10.1 depicts a firm's marginal revenue product curve. If the prevailing hourly wage decreases:
A. the marginal revenue product curve shifts upward. B. the marginal revenue product curve shifts downward. C. the marginal revenue product curve does not shift, but there is a movement upward along the curve. D. the marginal revenue product curve does not shift, but there is a movement downward along the curve.