The amount of pleasure or satisfaction derived from consumption of a good is called
A) need.
B) utility.
C) consumer surplus.
D) demand.
Answer: B
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What is a model? Can you think of a model that you might use in your everyday life?
What will be an ideal response?
Dividing fiscal policy into two instruments has the effect of introducing another policy target:
A) the interest rate. B) the national debt. C) the unemployment rate. D) the division of output between public and private spending.
A disagreement point is
A) an item of contention between the two bargaining players. B) a way of keeping score in a negotiation. C) the point in a negotiation where the players cannot reach an agreement. D) the outcome that occurs if there is no agreement in a bargain.
Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 10 percent,
a. the lender benefits from inflation, while the borrower loses from inflation. b. the borrower benefits from inflation, while the lender loses from inflation. c. neither the borrower nor the lender benefits from inflation. d. both the borrower and the lender lose from inflation.