The notion that the second unit of a good consumed improves the happiness of the consumer by less than the first unit improved the happiness of the consumer is summarized as
A. the real-balances effect.
B. diminishing marginal utility.
C. the substitution effect.
Answer: B
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Which of the following is an important difference between government and privately-owned enterprises?
A) Government can distribute goods without employing discriminatory rationing criteria. B) Government can more easily use negative incentives to obtain resources. C) Government does not produce exchangeable commodities or services. D) Government provides services at a lower opportunity cost. E) Government tends to pay close attention to the varying preferences of the people.
Which of the following is TRUE about current cost method and market value method?
A) They are used by the BEA to place current values on foreign indirect investments. B) These methods lead to the same valuations. C) Based on the current cost method, the BEA's 2009 estimate of U.S. net foreign wealth was $2,737.86 billion. D) The current cost method is preferred by the BEA. E) Foreign direct investments of the U.S. are valued at their original purchase price.
A decrease in the inflation rate will lead to a ________ nominal interest rate, which will ________ the debt-to-GDP ratio
A) higher; raise B) higher; reduce C) lower; raise D) lower; reduce
DeBeers was able to profit the most from the diamond market by selling a:
A. lot of diamonds at low prices. B. few diamonds at high prices. C. lot of diamonds at high prices. D. few diamonds at low prices.