If marginal utility is positive but diminishing, then
A) average utility must be negative.
B) total utility must also be diminishing.
C) total utility must be positive.
D) marginal utility must be more than total utility.
Answer: C
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Long-run equilibrium will occur at the price level at which
A) the aggregate demand and long-run aggregate supply curves intersect. B) the short-run aggregate supply and long-run aggregate supply curves intersect. C) the long-run aggregate demand and short-run aggregate supply curves intersect. D) the aggregate demand and short-run aggregate supply curves intersect.
The individual pictured in Figure 5.2
A) must be risk-averse. B) must be risk-neutral. C) must be risk-loving. D) could be risk-averse, risk-neutral, or risk-loving. E) could be risk-averse or risk-loving, but not risk-neutral.
Households and firms pay taxes to the government to:
a. increase their consumption spending. b. finance the country's import bill. c. increase their savings. d. improve their standard of living. e. finance government expenditures.
In a laissez-faire economy
A. the government decides how to distribute goods and services. B. a centralized authority establishes what will be produced. C. consumers do not exercise choice. D. individual people and firms pursue their own self-interest.