The law of diminishing marginal utility states that as additional units of a good are consumed a point is always reached where the utility derived from each additional unit declines.
Indicate whether the statement is true or false
Ans: True
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The New Economy is one of
a. durable goods. b. services. c. information. d. manufacturing.
Lars is CEO of a large monopolistic firm. He looks at what is going on with revenues and pricing, and being knowledgeable about running a monopoly, he decides to reduce production. What does this tell us about his firm?
a. Marginal cost is equal to marginal revenue. b. Marginal revenue is exceeding marginal cost. c. Marginal cost is exceeding marginal revenue. d. Marginal revenue is equal to price.
The concept of price elasticity of demand measures:
A. the slope of the demand curve. B. the number of buyers in a market. C. the extent to which the demand curve shifts as the result of a price decline. D. the sensitivity of consumer purchases to price changes.