Given the utility-optimizing rule and the presence of diminishing marginal utility for a good
A) the demand curve for the good will be vertical.
B) there will not be a well-defined demand curve.
C) there will not be a substitution effect.
D) the demand curve for the good will be negatively sloped.
Answer: D
You might also like to view...
Professional athletes often have contract clauses prohibiting risky activities such as skiing and motorcycle riding. These clauses are
A) limited-liability clauses. B) risk insurance. C) restrictive covenants. D) illegal.
Chris had a before-tax income of $20,000 and paid taxes of $3,000 . Pat had a before-tax income of $10,000 and paid taxes of $1,000 . Based on this information, which of the following is correct?
a. the tax system is regressive b. the tax system is proportional c. the tax system is progressive d. the tax system is based on the benefits received e. there is insufficient information to answer the question
Which of the following may be explained by adverse selection?
a. When banks raise the interest rate on loans, high-risk applicants leave the market. b. When health insurance companies decrease insurance charges but increase deductibles, less healthy people are more willing to purchase insurance. c. As the cost of insurance rises, low-risk applicants reduce their coverage. d. Products are sold at prices that reflect their true value. e. Loan companies do not require down payments.
If one tracks the prices of critical metals, one sees that
a. they have risen more slowly than the general rate of inflation. b. they have risen about as rapidly as the general rate of inflation. c. the prices indicate increasing scarcity of the metals. d. the prices have fluctuated too wildly to conclude anything.