Marginal utility theory assumes that when Sally consume less of a good that she was previously consuming more than one unit of, her ________
A) total utility increases
B) marginal utility increases
C) income increases
D) total utility is maximized
B
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What effect does the entry of new firms in a monopolistically competitive market have on the economic profits of existing firms in the market? How might existing firms attempt to counteract this effect?
What will be an ideal response?
As described in the text, which of the following statements best describes the strategy of many potato growers since 2005?
A) Growers have worked together to reduce supply and stabilize demand. As a result, equilibrium price has been propped up and allowed farmers to earn what they consider a decent profit. B) Growers have continued to compete vigorously with each other, causing prices and profits to decrease. C) Growers have restricted supply so much that there is now a severe shortage of potatoes in the United States. D) because efforts by potato growers to restrict supply are illegal in the United States, they have focused exclusively on increasing demand to increase their profits.
Ajax has just discovered that the marginal revenue product generated by the last worker hired was $50 while the marginal factor cost was $50. What should Ajax do?
A) Leave the level of production unchanged. B) Increase the amount produced. C) Reduce the amount produced. D) Collect more information before making a decision.
Microeconomics is the branch of economics that concerns
a. the overall health of the economy b. the behavior of individual households, firms, and governments c. the overall level of trade between nations d. local governments only e. the general level of output