Tom enjoys drinking Diet Coke with his lunch, but his enjoyment decreases after each glass he consumes. This is an illustration of
A. diminishing marginal utility.
B. the income effect.
C. the substitution effect.
D. consumer sovereignty.
Answer: A
You might also like to view...
Which of the following is directly accounted for in the calculation of GDP?
A) the value of one hour of leisure as measured by the hourly wage one would otherwise earn by working B) the value of repairing your own kitchen sink as measured by the average rates charged by local plumbers C) cash earnings from an illegal poker game D) improvements in quality of life from the reduction of pollution E) None of the above items is accounted for in GDP.
If an individual receives $10,000 after two years by investing $10,000 today, we can conclude that ________
A) the rate of inflation is zero B) the market rate of interest is zero C) the rate of inflation is negative D) the market rate of interest is negative
The very low inflation that the U.S. experienced in 2009 and 2010
a. appears to have reduced expected inflation, and the short-run Phillips curve shifted downward as a result. b. appears to have reduced expected inflation, and the short-run Phillips curve shifted upward as a result. c. does not appear to have reduced expected inflation, and the short-run Phillips curve remained relatively stable as a result. d. does not appear to have reduced expected inflation, but the short-run Phillips curve shifted dramatically nevertheless.
If the demand for olives falls when the price of cheese falls, then we know that cheese and olives are:
A. normal goods. B. substitutes. C. complements. D. inferior goods.