You decide to forgo a third slice of pizza and have a scoop of ice cream instead. This is an example of the economic concept of:
A. diminishing marginal utility.
B. altruism.
C. reciprocity.
D. selfishness.
A. diminishing marginal utility.
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In Figure 11.1, a decrease in the marginal propensity to save is represented by a change in the consumption function from
A) C1 to C3. B) C3 to C1. C) C2 to C1. D) C1 to C2.
Which of the following is a defining characteristic of a perfectly competitive market?
A) advertisements by well-known celebrities B) persistent economic profits in the long run C) no restrictions on entry into the industry D) higher prices being charged for certain name brands
The primary incentive for economic agents to formulate expectations rationally is to
A) increase earnings. B) increase prices. C) reduce prices. D) ensure that all expectations are realized.
What is the relationship between financial market development and economic growth?
What will be an ideal response?