The diamond-water paradox arises because:
A. essential goods may be cheap while nonessential goods may be expensive.
B. the marginal utility of certain products increases, rather than diminishes.
C. essential goods are always higher priced than nonessential goods.
D. we sometimes fail to use money as a standard of value.
Answer: A
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The "law of supply" refers to the fact that, all other things remaining the same, when the price of a good rises
A) the supply curve shifts leftward. B) the supply curve shifts rightward. C) there is a movement up along the supply curve to a larger quantity supplied. D) there is a movement down along the supply curve to a smaller quantity supplied.
Suppose Japan has a comparative advantage over Canada in the production of DVDs. This means that Japan:
a. needs fewer resources to produce DVDS than does Canada. b. has better technology for producing DVDs than does Canada. c. has a lower opportunity cost of DVD production than does Canada. d. can produce more DVDs in a given period of time than can Canada.
In the equation of exchange MV = PQ, V stands for
a. inventory turnover. b. total transactions in the economy. c. average rate of turnover of the money supply. d. variation in interest rates.
If the euro per dollar exchange rate changes from $1 = 0.8 euros to $1 = 0.7 euros, it implies that the euro has depreciated against the dollar
a. True b. False Indicate whether the statement is true or false