Observations of real-world situations that appear to violate a consumer optimum could be offered as evidence favoring
A) utility analysis.
B) bounded rationality.
C) diminishing marginal utility.
D) zero marginal utility at a utility-maximizing point.
Answer: B
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In Figure 3-7, if we compare a move from point B to C with a move from point A to point B, we can see that
A. the opportunity cost of the move from B to C is higher than the opportunity cost of a move from A to B. B. the opportunity cost of the move from B to C is lower than the opportunity cost of a move from A to B. C. the opportunity cost of the move from B to C is equal to the opportunity cost of a move from A to B. D. the production possibilities frontier has a positive slope.
As a form of business, a sole proprietorship
A) cannot issue stock. B) has limited liability. C) has the most government rules and regulations affecting it. D) has more than one owner.
Refer to Scenario 18.1. Which of the following is TRUE?
A) The factory will never agree to B, because that would leave them with much less profit than the fishermen. B) C will never occur because that would leave the fishermen with much less profit than the factory. C) If the factory refused to install a filter, the fishermen would refuse to install a treatment plant. D) The factory must install a filter, because they contaminate the water. E) The profits above indicate profit before any agreement is made, and profit varies enough to make a mutually acceptable agreement possible.
Most economists believe the severity and duration of the Great Depression was primarily the result of
a. the large budget deficits of the federal government. b. the reduction in tariffs and the influx of foreign imports during the early 1930s. c. the excessive use of credit cards. d. a sharp contraction in the money supply.