The Law of Diminishing Marginal Utility suggests that
A. when you consume more, you are less happy.
B. the more you consume, the less extra enjoyment you get out of each additional unit.
C. when you consume more, society is less well off.
D. when prices are higher, you buy more.
Answer: B
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A plot of the interest rates on default-free government bonds with different terms to maturity is called
A) a risk-structure curve. B) a default-free curve. C) a yield curve. D) an interest-rate curve.
Most economists agree that while there are a seemingly endless number of ways to promote economic development:
A. there are just as many ways to measure effectiveness. B. there are few ways to measure their effectiveness. C. there is no way to determine which ways are the best. D. there is no need to measure effectiveness.
Other things constant, which of the following would reduce unemployment and raise inflation?
a. businesses become more optimistic about the future of the economy b. because of high growth abroad, net exports rise c. the government cuts taxes d. All of the above are correct.
The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper. 
If Row Restaurant publishes coupons, Column Cafe would earn the highest profit if it:
A. also published coupons. B. did not publish coupons. C. chooses either strategy because Column Cafe will have the same profit in either case. D. only offered coupons half of the time.