When consumption spending is greater than disposable income, we know with certainty that we have
A) dissaving. B) negative net investment.
C) excess thrift. D) positive savings.
A
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An individual who is only willing to pay a relatively low amount for a particular good
A) would fall in the upper portion of the demand curve. B) would fall in the middle portion of the demand curve. C) would fall in the lower portion of the demand curve. D) would not be considered part of the demand curve.
Suppose you plan on eating 50 potato chips. As you start consuming potato chips, your marginal utility is very high, but it begins to fall slowly until you’ve eaten 10 chips. After you have eaten 10 chips, your marginal utility decreases even faster with each additional chip. Marginal utility continues to decline until you’ve eaten 49 chips. The fiftieth chip does not give you any additional utility. After 50 chips, your mouth gets so salty that it is unpleasant to eat any more, so marginal utility is actually negative for those chips. How many chips should you eat in order to maximize your total utility?
a. 1 b. 10 c. 49 d. 51
A reduction in the real interest rate will increase investment spending, other things equal, because firms will make an investment purchase if the expected return is
What will be an ideal response?
In a market economy, entrepreneurs are most concerned with:
A. maximizing profits or minimizing losses. B. increasing the wages and salaries of workers. C. maximizing utility or satisfaction from limited incomes. D. the selfish pursuit of money.