As people consume more and more of a particular good or service, we can predict that _____________ .
a. Marginal utility of each additional good consumed will fall and total utility will increase, but more rapidly than before
b. Marginal utility of each additional good consumed will fall and total utility will increase, but more slowly than before
c. Marginal utility of each additional good consumed will rise and total utility will increase, but more rapidly than before
d. Marginal utility of each additional good consumed will rise and total utility will increase, but more slowly than before.
Answer: b. Marginal utility of each additional good consumed will fall and total utility will increase, but more slowly than before
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According to the traditional (crowding-out) view, which of the following is most likely to result if a substantial portion of government expenditures is financed by borrowing rather than taxation?
a. no change in interest rates and an increase in saving b. higher interest rates and an outflow of foreign capital c. higher interest rates and a reduction in private domestic investment d. lower interest rates and an inflow of foreign investment
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A. It is established by legislation. B. Free riders are excluded. C. Users collectively consume benefits. D. It is determined by positive economics.
An indifference curve represents the collection of goods and services that an individual has no desire to consume
Indicate whether the statement is true or false