The consumption of an additional unit of a good provides additional satisfaction, which is called:
A. average utility.
B. total benefit.
C. marginal social benefit.
D. marginal utility.
Answer: D
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Variable costs increase when output rises.
Answer the following statement true (T) or false (F)
An invention that speeds up the Internet is an example of
A) an income effect. B) an increase in labor. C) a substitution effect. D) a supply shock.
The price of chocolate chips has increased. For the producers of chocolate chip cookies, this means:
A. they can supply more at each price because some of the competition will drop out. B. they can supply less at each price because the price of a main input has gone up. C. they can supply more at each price because the price of a main input has gone up. D. they can supply more at each price because of more competition.
Suppose the United States pursued an expansionary fiscal policy to stimulate its economy and eliminate a recession. The crowding-out effect suggests that:
A. net exports would increase, thus increasing aggregate demand and partially reinforcing the fiscal policy. B. private investment would decrease, thus increasing aggregate demand and partially offsetting the fiscal policy. C. private investment would decrease, thus decreasing aggregate demand and partially offsetting the fiscal policy. D. net exports would increase, thus decreasing aggregate demand and partially offsetting fiscal policy.