The statement "as more of a good is consumed, the utility a person derives from each additional unit diminishes" is known as the:
A. water and diamond paradox.
B. law of diminishing marginal utility.
C. law of total utility.
D. marginal-utility-to-price ratio equalization rule.
Answer: B
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When external benefits are present,
A) competitive markets are efficient. B) competitive markets are inefficient. C) a tax is required to eliminate the inefficiency. D) property rights have already been established.
At a price of $9.99, Danielle buys 3 digital books per month. When the price decreases to $7.99, Danielle buys 4 digital books per month. Jason says that Danielle's demand for digital books has increased. Is Jason correct?
A) Yes, Jason is correct. B) No, Jason is incorrect. Danielle's demand has decreased. C) No, Jason is incorrect. Danielle's quantity demanded has decreased, but her demand has stayed the same. D) No, Jason is incorrect. Danielle's quantity demanded has increased, but her demand has stayed the same. E) No, Jason is incorrect. Danielle's quantity demanded has increased and her demand has decreased.
Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):
A. leftward shift in the demand curve for generic goods. B. downward movement along the demand curve for generic goods. C. rightward shift in the demand curve for generic goods. D. upward movement along the demand curve for generic goods.
The Keynesian short-run aggregate supply (SRAS) curve
A. assumes a full-employment level of real Gross Domestic Product (GDP). B. is horizontal. C. shows that real Gross Domestic Product (GDP) will increase only if the price level increases. D. does not reflect any changes in nominal Gross Domestic Product (GDP).