Which of the following situations is clearly inconsistent with the law of diminishing marginal utility?
a. Even a person with a huge appetite will eventually turn away food at an all-you-can-eat buffet.
b. Some western ski areas close down when there is still considerable snow in the mountains in May because they can no longer attract enough skiers to the slopes.
c. Newcomers to the California coast visit the beach much more frequently than long-term residents or natives.
d. Diamond jewelry consumption has no disutility to the elite class as it signals prestige.
d
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In the economic way of thinking, a tropical rainforest is a scarce good. Thus,
A) there is no substitute for a tropical rain forest. B) there is a substitute for a tropical rain forest. C) tropical rains forests should be preserved at any cost. D) tropical rain forests can be preserved at no cost. E) economists don't like tropical rainforests.
The law of increasing additional cost exists because
A) resources are not perfectly adaptable to both production processes. B) the demand for the product increases. C) the cost of resources of the products increase. D) the cost of resources of the products decrease.
What role do losses play in a competitive price-searcher market?
a. They penalize a firm for producing a differentiated product. b. They signal that more resources are needed in a particular market. c. They show firms that barriers to entry are high. d. They send a message that more value would be created if the resources were used to produce other goods.
One reason some manufacturing companies have moved production from overseas locations back to the United States is an increasing preference by U.S. consumers for products made in the United States. Assuming that managers at these companies used all
available information, including the increased preference by U.S. consumers for domestically produced, when making the decision to move production back to the United States exemplifies which key economic idea? A) People are rational. B) People respond to economic incentives. C) Optimal decisions are made at the margin. D) The market system relies on the principle of voluntary exchange.