According to the principle of diminishing marginal utility, as the quantity of a good or service consumed increases, total utility
A) increases.
B) decreases.
C) is unchanging.
D) is zero.
A
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The failure of a major financial company is often a trigger for a financial crisis. The main reason for trouble at a single firm to become a crisis for the entire economy is that ________
A) the central bank will suspend operations until the failed firm is restructured B) it is unclear whether the firm's collapse will remain an isolated event C) customers of the failed company will organize a boycott to protest their losses D) employees and owners of the failed company reduce their spending, with adverse effects on other businesses
The bowed shape of the traditional production possibilities curve reflects the
A) negative side effects of economic growth. B) fact that not all resources are equally well-suited to producing all goods. C) costs of unemployment. D) problems of inequality.
The position of the long-run aggregate supply curve is determined by
A) the long-run aggregate demand curve. B) the production possibilities curve. C) the open economy effect. D) the interest rate effect.
If a central bank wants to keep the value of its home currency fixed in the foreign exchange market, then an increase in the demand for its home currency will lead the central bank to
A) do nothing. B) sell its home currency. C) buy its home currency. D) sell foreign currencies.