The marginal-utility-to-price ratio tells us that if the price of a good falls, then, ceteris paribus
a. its marginal-utility-to-price ratio falls
b. its marginal-utility-to-price ratio rises
c. its marginal utility falls
d. its marginal utility rises
e. consumers buy less of the good
b. its marginal-utility-to-price ratio rises
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What are the main functions of money?
What will be an ideal response?
If production involves increasing opportunity cost, then moving nearer the horizontal axis will increase the opportunity cost of
a. the good that is shown on the horizontal axis. b. the good that is shown on the vertical axis. c. both of the goods shown on the axes. d. neither of the goods shown on the axes.
The Fed's power to set the required reserves of commercial banks:
A. provides a certain source of interest income for commercial banks. B. allows the Fed to control the lending ability of commercial banks and, thereby, control the money supply. C. prevents banks from hoarding too much vault cash. D. prevents commercial banks from earning excess profits.
The decisions on the part of the government to increase spending by $5 billion will have the largest impact on aggregate demand when the spending is financed by the sale of bonds to
A. the member banks. B. the public. C. the Fed. D. foreigners.