When total utility is at a maximum
A) marginal utility is at a minimum.
B) marginal utility is negative.
C) marginal utility is zero.
D) marginal utility is equal to total utility.
Answer: C
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A price control is:
A) a market determined equilibrium price. B) a non-market price imposition. C) the price at which quantity demanded equals quantity supplied. D) the price that maximizes social surplus.
If the MPC is 0.9, and the government cuts spending by $200b, the overall effect on GDP will be:
A. a decrease of $2,000b. B. an increase of $2,000b. C. a decrease of $1,800b. D. an increase of $180b.
An individual firm has little incentive to voluntarily internalize any external costs it was creating because: a. it would shift its cost curves downward
b. it would put it at a competitive disadvantage compared to its rivals. c. it would have to increase output to make up for the added costs. d. they do not care at all about other people.
The optimization assumption suggests that people make
A. unpredictable decisions. B. decisions without thinking very hard. C. decisions to make themselves as well off as possible. D. irrational decisions.