The diamond-water paradox is an example that shows that
A. marginal utility can initially increase and then decrease.
B. necessities like water should have a higher price.
C. there are exceptions to the law of diminishing marginal utility.
D. marginal utility rather than total utility determines what people are willing to pay for a good.
Answer: D
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A textbook publisher is in monopolistic competition. The firm can sell no books at $100 a book, but for each $10 cut in price, the quantity of books it can sell increases by 20 books a day
The firm's average variable cost and marginal cost is a constant $20 per book. What is the publisher's profit-maximizing level of output? A) 60 books per day B) 80 books per day C) 100 books per day D) 120 books per day
Fiscal federalism in the EU refers to
A) one nation's control of the monetary policy of all the other nations. B) freedom of member countries to leave the EU at any time. C) the transfer of economic resources from members with healthy economies to those suffering economic setbacks. D) one nation's freedom to abandon the Euro and use its own currency. E) the transfer of economic resources between members with healthy economies.
The United Auto Workers is striking against Ford. The Teamsters refuse to deliver steel to Ford. This is an example of
A) a jurisdictional dispute and is illegal under the Taft-Hartley Act. B) a secondary boycott and is illegal under the Taft-Hartley Act. C) a sympathy strike and is illegal under the Taft-Hartley Act. D) a closed shop and is illegal under the Wagner Act.
Best National Bank operates with a 20 percent required reserve ratio. One day a depositor withdraws $500 from his or her checking account at this bank. As a result, the bank's excess reserves:
a. fall by $500 b. fall by $400. c. rise by $100 d. rise by $500.