As an individual consumes more of a particular good, the total level of utility derived from that consumption usually
A) increases at a constant rate.
B) increases at an increasing rate.
C) increases at a decreasing rate.
D) decreases at an increasing rate.
Answer: C
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Before an uneven rise in prices Allan consumed five bread and six juice. After the price increase and with an increased welfare payment from the government Allan consumes four bread and seven juice
Does the government payment represent a true cost-of-living adjustment? A) Yes, if the two consumption bundles lie on the same indifference curve. B) Yes, if the second bundle yields more utility than the first. C) No, the first bundle is clearly preferred. D) Not enough information.
During a period of deflation,
A. People on fixed incomes are better off. B. People who hold cash are worse off. C. The price level rises. D. Lenders are worse off.
Net unilateral transfers would appear in a nation's
A. capital account. B. official reserve transaction account. C. financial account. D. current account.
Comparative advantage is based on
A) comparing physical endowments, such as mineral resources, of two countries. B) differences in opportunity costs between two countries. C) one country being able to outproduce another country in some good. D) comparing the capital accumulation of two countries. E) two countries producing the same good.