Utility refers to
A) the usefulness of a good or service.
B) the value of a good or service.
C) the want-satisfying power of a good or service.
D) the degree to which a good or service is needed.
Answer: C
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What is a difficulty encountered in regulating international banking?
A) excessive deposit insurance rates on international banks B) absence of reserve requirements C) oppressive regulatory controls that reduce competitiveness D) lack of funds and incentive to secure payments E) variability in exchange rates
Because households have limited incomes, they must
a. rarely take vacations b. live below the poverty line c. allocate their spending carefully d. gamble in casinos frequently e. save for the future
________ and ___________ represent "new wave regulation"
Fill in the blank(s) with the appropriate word(s).
The owner of Tie-Dyed T-shirts, a perfectly competitive firm, has hired you to give him some economic advice. He has told you that the market price for his shirts is $20 and that he is currently producing 200 shirts at an AVC of $15 and an ATC of $25. What would you recommend to him?
A. To shut down in the short run, as he is incurring a loss, and to leave the industry in the long run, if there are no changes in economic conditions. B. To continue producing in the short run, as his loss from production is less than his fixed costs, but to exit the industry in the long run if there are no changes in economic conditions. C. To continue to produce in the short run, even though he is earning a loss, and to expand in the future with the hope of increasing market share and total revenue. D. You tell him you cannot make any recommendations until you know what his fixed costs are.