Refer to the following graph.
Marginal utility is:
A. negative between A and B.
B. negative between B and C.
C. negative between C and D.
D. not negative anywhere along the total utility curve.
Answer: C
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An example of a market subject to adverse selection would be:
A. the insurance market. B. the financial market. C. the used car market. D. All of these statements are true.
Under the gold standard,
a. no nation had control of its domestic monetary policy, and therefore no nation could control its aggregate demand. b. the world's commerce was at the mercy of gold discoveries. c. discoveries of gold meant higher prices in the long run and higher real economic activity in the short run. d. All of the above are correct.
If the government regulated a natural monopolist to achieve price efficiency without subsidies or price discrimination, the monopolist would
A. Lose money and go out of business. B. Earn less profit than before, but still earn a profit. C. Earn economic profits. D. Earn only normal profits.
The economy characterized by the data is:
A. experiencing inflation because disposable income exceeds personal income.
B. experiencing declining production capacity because net investment is negative.
C. in a depression because personal income exceeds disposable income.
D. experiencing expanding production capacity because net private domestic investment is
positive.