When total utility is falling
A) marginal utility is at a maximum.
B) marginal utility is at zero.
C) marginal utility is negative.
D) marginal utility has decreased, but is now increasing.
Answer: C
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Colleges offer tuition scholarships even when they are running budget deficits because colleges
A) are public service institutions. B) can often earn additional net income by offering tuition scholarships. C) hope to receive contributions later from the recipients of scholarships. D) set tuition levels and establish scholarship policies without considering the monetary advantages.
The labor demand curve slopes downward because
A) the firm maximizes profits by hiring more labor when the real wage rate rises. B) workers supply more hours of work when the real wage rate rises. C) the firm maximizes profits by hiring more labor when the real wage rate falls. D) workers supply fewer hours of work when the real wage rate rises.
An effective price ceiling occurs when
A) the government sets a maximum price for a good above the equilibrium price. B) the government sets a minimum price for a good above the equilibrium price. C) the government sets a minimum price for a good below the equilibrium price. D) the government sets a maximum price for a good below the equilibrium price.
In the above figure, starting at E1, if there is a supply shock that is temporary, the
A. aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1. B. aggregate supply would shift to SRAS0 and LRAS1 would shift to LRAS0. C. aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1. D. aggregate supply would shift to SRAS1 and then return to SRAS0.