Diminishing marginal utility means that as more of a good is consumed
A. the rate at which total utility increases stays the same.
B. there is no impact on the rate of change of total utility.
C. the rate at which total utility increases starts to increase.
D. the rate at which total utility increases starts to diminish.
Answer: D
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The establishment of well-defined property rights increases:
A. the unemployment rate. B. the amount of pollution. C. average labor productivity. D. the labor force participation rate.
Which of the following is not a problem for the price system allocating resources among different time periods?
A. Interest rates are used for a variety of purposes other than influencing investment. B. The market devotes too much to immediate consumption. C. Our market system leads to lesser real incomes for later generations. D. Our market system despoils irreplaceable natural resources.
Why is monetary policy more effective in an open economy than in a closed economy?
A. Trade deficits affect exchange rates, which can offset adverse interest rate effects. B. Borrowers can choose to use foreign capital, so that interest rate effects are stronger than expected. C. Interest rate changes affect exchange rates, so that capital flows reinforce the effect of monetary policy. D. Banks can choose to lend to foreigners, so that interest rate effects are essentially nullified.
For barter to occur there must be
A) two people willing to pay with credit. B) a double coincidence of wants for each good to be exchanged. C) one person who pays cash. D) hyperinflation.