Because of diminishing marginal utility, you
A. should never buy more than one unit of a good, since additional units decrease your total utility.
B. have to consider the effect of additional units on your total utility when you make purchases.
C. wind up paying for units that you receive no benefit from.
D. always want to increase your consumption of a good until the marginal utility you get is zero.
Answer: B
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The theory of investment that emphasizes the role of expected growth in real GDP on investment spending is known as
A) the theory of animal spirits. B) the accelerator theory. C) real business cycle theory. D) the multiplier theory.
When the economy is going strong:
A. firms expand their operations. B. demand for workers decreases. C. GDP growth is negative. D. firms tend to lay off workers.
Which of the following occurs during an expansion?
a. Output rises, employment rises and unemployment falls. b. Output falls, employment rises and unemployment falls. c. Output rises, employment falls and unemployment falls. d. Output rises, employment rises and unemployment rises. e. Output rises, employment rises and tax revenues fall.
Which of the following accounts for the largest percentage of all federal expenditures?
A. income security such as Social Security B. national defense C. interest on the public debt D. veterans' services