Marginal utility is a measure
a. of total utility derived from consuming a given amount of a good
b. of the total utility gained from consuming an extra unit of a good
c. computed by dividing total utility by the amount of a good consumed
d. determined by production conditions in a market
e. of the cost associated with consuming one more unit of a good
B
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Money prices are an extremely effective device for promoting social cooperation because
A) most people want money more than they want anything else. B) people are basically selfish. C) scarcity can be eliminated through appropriate changes in money prices. D) they don't change rapidly when circumstances change. E) they help to clarify the options available to people.
In a centrally planned economy
A. consumers do not have to consider prices when shopping. B. prices are zero. C. the government sets prices and decides how much of each good is to be produced. D. producers have an incentive to produce those goods most desired by consumers at the lowest cost.
As compared to a perfectly competitive firm, a monopolistically competitive firm will:
A. have more control over price. B. have less control over price. C. face more barriers to entry. D. face many more competitors.
How is the quantity theory of money different from the quantity equation and why must the quantity equation always be true?
What will be an ideal response?