The principle of diminishing marginal utility states that:
A. you enjoy consuming more of a good if it is good.
B. as you consume more of a good, you enjoy the additional units more than you did the initial units.
C. you don't enjoy consuming more of a good.
D. as you consume more of a good, you enjoy the additional units less than you did the previous units.
Answer: D
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
If at the current level of product-specific service, consumers' value at $15 and the cost of retailers to provide the services is $10, which of the following is true?
A) the profit-maximizing level of profit-maximizing services is less than the current level B) the profit-maximizing amount of product-specific services is being offered. C) the profit-maximizing level of profit-maximizing services is greater than the current level D) the profit-maximizing level of profit-maximizing services is exactly one -half of the current level
Refer to Scenario 7.1 below to answer the question(s) that follow. SCENARIO 7.1: You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. Refer to Scenario 7.1. Your economic profit last year was
A. -$40,000. B. -$10,000. C. $10,000. D. $30,000.
This Application refers to quantitative easing, a policy that occurs when the Fed
A) changes the reserve requirement. B) purchases long-term securities. C) raises the discount rate. D) sells mortgage-backed securities.