Which statement best illustrates the concept of diminishing marginal utility?
A. Some consumers will receive less satisfaction from consuming pizza than from consuming hamburgers.
B. As one consumes more slices of pizza for lunch, one would be willing to pay a higher price for additional slices.
C. A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice.
D. A decrease in the price of slices of pizza will cause consumers to buy more slices for lunch, because they can afford to buy more.
Answer: C
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In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can
A) gain from exchange if Brandon specializes in planting and Christopher specializes in plowing. B) gain from exchange if Brandon specializes in plowing and Christopher specializes in planting. C) exchange, but only Brandon will gain from the exchange. D) exchange, but only Christopher will gain from the exchange.
One of the reasons protectionists and government officials may favor using a quota instead of a tariff is
A. quotas create less market distortions than tariffs. B. quotas give less power to politicians than tariffs. C. quotas ensure that the quantities of imports are strictly limited. D. quotas generate more revenue for the government than tariffs.
If the company can correctly anticipate the adverse selection, what premiums would it charge?
a. $2500 b. $2600 c. $1000 d. $1100
Consumption spending is:
A. negatively related to the overall price level. B. positively related to the overall price level. C. equal to the overall price level. D. not correlated with the overall price level.