When you are hungry, you receive the most satisfaction from the first apple and less satisfaction from each additional apple. What explains this?
a. income effect
b. substitution effect
c. law of elasticity of demand
d. law of diminishing marginal utility
Ans: d. law of diminishing marginal utility
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When the Pilgrims first arrived in North America, they established communal ownership of all pastures and of all agricultural production. As is common with communal ownership, this communal ownership by the Pilgrims resulted in
A) underproduction and underconsumption. B) underproduction and overconsumption. C) overproduction and underconsumption. D) overproduction and overconsumption.
How can a bond have a negative rate of return?
A) if the current yield is greater than the coupon rate B) if the current yield is less than the coupon rate C) if the rate of capital loss exceeds the current yield D) if the rate of capital gains is less than the current yield
The country of Bananaland has an abundant supply of banana trees and therefore must be a modern industrial economy
a. True b. False
Pollution is an example of an _____________ cost.
Fill in the blank(s) with the appropriate word(s).