Katie just finished a bottle of Coke. Using the concept of marginal utility, we can say:
A. the utility she will gain if she drinks another will increase her total utility.
B. the utility she will gain if she drinks another will be the same as that of her first.
C. the utility she will gain may or may not reduce her total utility.
D. the utility she will gain if she drinks another will reduce her total utility.
Answer: C
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Use the following diagram to answer the next question.
If CD is the economy's current production possibilities frontier, what is the most likely reason for operating at point X?
A. increases in the quantity and the quality of resources B. improvement in labor productivity and the number of work-hours C. technological progress and industrial change D. unemployment and inefficient allocation of resources
Explain the differences between discretionary fiscal policy and automatic stabilizers, and give one example of each
What will be an ideal response?
If a good is a normal good, an increase in income will
A) decrease the quantity demanded of the good. B) increase the demand for the good. C) cause the demand curve for the good to shift to the left. D) cause a movement down along the demand curve.
The oversimplified formula for the multiplier is misleading because it ignores the effects of
a. price-level changes. b. the foreign sector. c. variable taxes. d. All of the above are correct.