A local restaurant offers an "all you can eat" ribs special. You pay $11.95, and then you can eat as many servings as you desire at no additional cost. It would follow that you will stop eating when:
a. your marginal utility (or value) derived from eating another serving is zero.
b. your total utility (or value) derived from all of the servings consumed just equals $11.95.
c. your marginal utility (or value) derived from another serving equals $11.95.
d. it is physically impossible for you to eat any more.
a
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The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will ________ and your marginal utility from each additional slice of pizza will ________
A) increase; decrease B) decrease; increase C) increase; increase D) decrease; decrease
A decrease in the price of a good or service
a. causes the budget line to rotate inward b. causes a parallel outward shift of the budget line c. means that less of the good can be purchased with a given income d. causes the budget line to rotate outward e. causes a parallel inward shift of the budget line
A fundamental principle of economics is that every choice has a(n) _____________ cost.
a. established b. variable c. fixed d. opportunity
When the macro equilibrium is above full employment, fiscal policy should be used to shift aggregate demand by the amount of
A. The difference between saving and investment. B. The AD excess, which also allows for price level changes. C. The difference between desired saving and desired investment. D. None of the choices are correct.