The water-diamond paradox discussed in the text implies that
a. water, unlike diamonds, is not subject to the law of diminishing marginal utility
b. the less abundant a good, the lower is its marginal utility although its total utility may still be relatively high
c. the more abundant a good, the lower is its marginal utility although its total utility may still be relatively high
d. people would trade water for diamonds, a useful for a useless good
e. the price of water is higher than the price of diamonds
C
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In a situation in which internal costs differ from social costs, we say that there exists a(n)
A) welfare loss. B) welfare benefit. C) internality. D) externality.
Which of the following is an example of an individual motivated by self-interest?
a. a student volunteering at a soup kitchen b. an attorney providing free legal service to low income families c. a man buying a new Camaro d. all of the above
The income effect in the work-leisure model induces a person to work less in response to higher wages, which tends to make the labor-supply curve slope backward
a. True b. False Indicate whether the statement is true or false
Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Cars SoldTrucks SoldLarry105Joe99Ralph312 Based on last month's data, Joe's opportunity cost of selling a truck is selling:
A. 4 cars. B. 1/3 of a car. C. 1 car. D. 9 cars.