Answer the following statements true (T) or false (F)
1. If the price of a good increases, it will tend to make the MU-to-P ratio for the good rise and the good becomes more attractive to the buyer.
2. The law of diminishing marginal utility implies that in order to induce a buyer to buy more of a product, the seller must lower its price.
3. The income effect of a price-increase for a normal good causes an increase in the consumption of the good.
4. The substitution effect of a price-decrease for a good causes an increase in the consumption of the good, regardless of whether the good is normal or inferior. 5. An increase in the real income of a consumer is one result from an increase in the price of a product that the consumer is buying.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5.FALSE
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Where pollution is prevalent, we might expect that
a. externalities are being effectively internalized b. marginal social costs are greater than marginal private costs c. marginal costs are greater than marginal benefits d. marginal private costs are greater than marginal social costs e. externalities are not important
Firms with a continuous need for working capital financing will probably want to have __________ with a bank
A) credit rationing B) individually negotiated loans C) repurchase agreements D) a line of credit
Which of the following facilitates the movement of checks across the country?
a. Board of Governors b. Treasury Department c. Federal Open Market Committee d. Federal Reserve Banks e. Department of Commerce
The major sources of federal government revenue, in descending order of their importance, are
a. individual income taxes, social-insurance contributions, and corporate profits taxes. b. payments from the Federal Reserve, corporate profits taxes, and individual income taxes. c. social-insurance contributions, corporate profits taxes, and individual income taxes. d. corporate profits taxes, payments from the Federal Reserve, and individual income taxes.