According to the law of ______, a chocolate cake will provide less satisfaction with each successive slice consumed.
a. substitution
b. income
c. consumer equilibrium
d. diminishing marginal utility
d. diminishing marginal utility
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Refer to Figure 5-3. With insurance and a third-party payer system, what price do consumers pay for medical services?
A) $40 B) $55 C) $65 D) > $65
In the classical theory of aggregate demand, a decrease in the velocity of money leads to
a. a downward shift in the aggregate demand curve, a fall in prices, and no change in output. b. an increase in the aggregate demand curve, a rise in prices, and no change in output. c. no change in aggregate demand or supply because higher velocity increases the money supply. d. an upward shift in the aggregate demand curve, a fall in prices, and no change in output.
Moral hazard implies that
a. Insured individuals exercise less care because they have less incentive to do so b. Insured individuals exercise more care because they have less incentive to do so c. Insured individuals exercise more care because they have more incentive to do so d. Insured individuals exercise less care because they have more incentive to do so
Using the information in the figure and table below, which of the following statements is true?
a. Consumers are just as well off in all three markets. b. Producers are just as well off in all three markets. c. Deadweight loss is the same in all three markets. d. Total welfare is lower in a monopoly that charges a single price than the monopoly in either perfect competition or perfect price discrimination.