Which of the following statements is TRUE?
A) As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility.
B) As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility.
C) No two people have identical utility functions, just as no two people have identical fingerprints.
D) Both A and C above.
B
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Assume a firm is a monopoly and enjoys $10,000,000 profits per year. The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years
If there is no discount rate, how much would any firm(s) arguing against the moratorium be willing to spend to block it? A) something less than $250 million B) $250 million C) $251 million D) $250 billion
In the late 1990s, debt-financed government spending decreased in Mexico. Following this decrease, consumption spending increased. Ricardian equivalence would explain this increase in consumption as the result of:
a. people's expectation of higher future taxes required to pay off government debt. b. people's expectation of lower future taxes that induce them to save less. c. automatic stabilization of the economy. d. the crowding out effect. e. an increase in current household disposable income.
Some people argue that the three main television networks all have similar programming. If true, this observation might best be explained by the:
A. paradox of voting. B. median-voter model. C. law of diminishing marginal utility. D. ability-to-pay principle.
The relationship between planned consumption and real disposable income is referred to as
A. the multiplier. B. the wealth function. C. the saving function. D. the consumption function.