The ________ states that things with the greatest value in use frequently have little or no value in exchange.
A. law of reverse exchange
B. diamond/water paradox
C. utility conundrum
D. law of diminishing marginal utility
Answer: B
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A government budget surplus from reduced government spending (no change in net taxes) will ________ the level of investment in the economy and ________ the level of saving (private plus public) in the economy
A) increase; decrease B) increase; increase C) decrease; decrease D) decrease; increase
Would a profit-maximizing firm sell at a price where demand is inelastic? Explain.
What will be an ideal response?
By including another variable in the regression, you will
A) decrease the regression R2 if that variable is important. B) eliminate the possibility of omitted variable bias from excluding that variable. C) look at the t-statistic of the coefficient of that variable and include the variable only if the coefficient is statistically significant at the 1% level. D) decrease the variance of the estimator of the coefficients of interest.
Which of the following is likely to shift the production possibilities curve outward? a. A change in preferences away from one of the goods and toward the other
b. An invention that reduces the amount of natural resources necessary for producing a good. c. The discovery of new natural resources. d. Both b. and c. are likely to shift the production possibilities curve outward.