The law of diminishing marginal utility states that
A. Marginal utility always falls to zero after two or three units of a good consumed.
B. As a consumer enjoys successive units of a good, eventually marginal utility will fall.
C. The total utility of consuming the next unit of a good falls.
D. The total utility of a good rises at a fast rate as more units of a good are consumed.
Answer: B
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In the United States between the 1970s and the 2000s, the productivity of labor increased. This increase led to
A) an increase in the demand for labor. B) no change in either the demand for or the supply of labor. C) a decrease in the supply of labor. D) a downward shift of the production function. E) an increase in the supply of labor.
Refer to Figure 2-9. Which country has a comparative advantage in the production of snow cones?
A) Greenland B) They have equal productive abilities. C) Iceland D) neither country
According to the AK growth model, taxes on corporate income and capital gains ________ the incentive for firms to accumulate capital and ________ the steady-state growth rate
A) increase; increase B) reduce; reduce C) increase; do not change D) reduce; do not change
State and local governments receive most of their revenue from
A) sales and excise taxes, revenue from the federal government, and property taxes. B) individual income taxes, social insurance contributions, and property taxes. C) corporate income taxes, property taxes, and personal income taxes. D) property taxes, sales and excise taxes, and Social Security contribution.