According to utility? theory, consumer purchase decisions are made such that
A. the total utility from consuming the good is less than the marginal utility of the last unit consumed.
B. the total utility of the last unit purchased is equal to the price of that unit.
C. the difference between the value of the marginal utility of the last unit purchased and the price paid is maximized.
D. the value of the ratio of marginal utility to price for the last units purchased and consumed is equal.
Answer: D. The value of the ratio of marginal utility to price for the last units purchased and consumed is equal.
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Incorporation of expectations into economic decision making indicates that in the long run:
a. inflation relates directly to unemployment. b. inflation is inversely related to unemployment. c. the Phillips curve is vertical at the natural rate of unemployment. d. high unemployment is a primary cause of inflation.
An excess supply will cause price to fall
Indicate whether the statement is true or false
Which of the following is the best definition of economics?
a. An investigation of the quantities and prices of the various goods produced by the nations of the world. b. A study of why inflation and unemployment periodically plague the U.S. economy. c. An analysis of how individuals and societies deal with the problem of scarcity. d. An examination of the role that money plays in the economy. e. A study of how goods and services are distributed throughout the world.
Which of the following government policies is least likely to increase the standard of living in the United States?
a. Investment in education and skills training for workers b. Raising the minimum wage paid to workers c. Investment in technology d. Investment in tools and capital for workers