Utility is maximised when the utility for the last euro spent on each product is maximised, this is explained by
a) Law of Diminishing Marginal Utility.
b) Equi-Marginal Principle.
c) Total Utility.
d) Marginal Utility.
Answer: b) Equi-Marginal Principle.
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The annual cost of producing the entire output of goods and services in the economy
A) includes durable goods but excludes nondurable goods. B) is total income. C) can be calculated entirely on the basis of financial transactions. D) includes financial transactions.
The supply of loanable funds curve has a ________ slope and the demand for loanable funds curve has a ________ slope
A) negative; positive B) positive; negative C) negative; negative D) positive; positive E) vertical; horizontal
If demand for good is very inelastic and supply for the good is very elastic a sales tax imposed on sellers will cause the price received by sellers
A) would not change very much. B) would rise by more than the amount of the tax. C) would fall by an amount of the tax. D) would fall by more than the amount of the tax.
Competitive markets with no external costs or benefits and no government price ceilings, floors, taxes or subsidies ________ efficient. According to the "It's not fair if the rules aren't fair" idea of fairness, competitive markets ________ fair
A) are; are B) are; are not C) are not; are D) are not; are not