Total utility is maximized when
A. Marginal utility is zero.
B. Price is equal to marginal utility.
C. Price is less than marginal utility.
D. Marginal utility is maximized.
Answer: A
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If the price of flashlights in production increases, then supply of ______ would most likely increase.
a. batteries b. pencils c. olive oil d. iron ore
Prices enable a market economy to adjust to unexpected events by
a. maintaining consumption and production at stable levels. b. government rationing. c. ensuring that producers always earn a profit. d. adjusting consumption and production.
GDP measures underestimate the value of output produced by an economy because they include services not transferred through markets.
Answer the following statement true (T) or false (F)
The Cold War was of overriding importance during the period after World War II for all of the following reasons except
(a) It was an automatic "pump primer" which helped keep spending levels high in the overall economy. (b) It helped fuel growth of key sectors of the economy, such as aircraft manufacturing and computers. (c) It fostered economic growth and urbanization in many parts of the nation where military bases and defense factories were built. (d) It put people to work who would otherwise have been unemployed because without high levels of defense spending, the economy almost certainly would have lapsed back into a depression like the one of the 1930s.