If a university cafeteria changes from selling each food item separately to offering all-you-can-eat meals for one low price, one would expect that the marginal utility of the last food item consumed in the cafeteria by the typical student would decrease since more food is now likely to be consumed by students who eat a meal in the cafeteria
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
During the recession of 2008, the U.S.experienced lower real interest rates at the same time investment and GDP were falling
How would a Classical economist explain this recession? Provide a graph of the Classical capital market to illustrate your arguments.
The Interstate Commerce Commission (ICC) regulates railroads, barges and trucks. Suppose technical change lowers the costs of railroads
As a result, the ICC permits railroads to lower prices some but also alters the rates of barges and trucks so they get additional business. The ICC would be acting consistently with A) the capture theory of regulation. B) the public interest theory of regulation. C) the share-the-gains, share-the-pains theory of regulation. D) None of the theories presented in the text since economic regulation is specific to a single industry and not to agencies that cover more than one industry. That is the province of social regulation.
A binding price floor is designed to:
a. increase efficiency. b. raise the price above the equilibrium price. c. keep the price below the equilibrium price. d. generate a shortage
In the Keynesian framework, which of the following event might cause a recession? Which might cause inflation? Sketch AD/AS diagrams to illustrate your answers.
a. A large increase the price of the homes that people own. b. Rapid growth in the economy of a major trading partner. c. The development of a major new technology offers profitable opportunities for business. d. The interest rate rises. e. The good imported from a major trading partner become much less expensive.