Why are diamonds more expensive than water?
A. because the last diamond has higher marginal utility than the last glass of water
B. because the last glass of water has higher marginal utility than the last diamond
C. because water is a necessity
D. because you get more total utility from diamonds
Answer: A
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Except for perfect substitutes or perfect complements, indifference curves
A) are straight lines with a positive slope. B) slope upward to the right. C) are bowed in toward the origin. D) are bowed out away from the origin.
Using the concept of income and substitution effects, explain how you might react to each of the following:
(a) You currently work 20 hours a week at $10 per hour and your employer tells you he must reduce your wage to $8 per hour. (b) The price of pizza doubles and the price of hamburgers remains constant.
The slope of a line is equal to
a. the change in the value of x divided by the change in the value of y. b. the change in the value of y divided by the change in the value of x. c. the horizontal distance divided by the vertical distance. d. the value of y divided by the value of x.
Privatization refers to the process of hiring private management consultancy firms to manage state-owned enterprises.
a. true b. false