Thinking about the total utility gained from the consumption of a typical good, we can say in general that:
A. total utility will rise, peak, and then decline as more and more units are consumed.
B. consuming more and more units of a good will eventually cause marginal utility to increase
C. total utility increases by decreasing amounts, until it is maximized. Then it declines.
D. total utility is maximized where the marginal utility is greatest.
A. total utility will rise, peak, and then decline as more and more units are consumed.
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E. Carey Brown, an MIT economist, studied government deficits during the Great Depression and found that even though actual deficits were large, the structural deficit changed very little. Which of the following statements is consistent with this finding?
a. Fiscal policy did not work during the Depression. b. Fiscal policy made the Depression worse. c. Fiscal policy was not tried during the Depression. d. Fiscal policy improved the economy during the Depression.
Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?
a. The interdiction has the effect of shifting the demand curve for illegal drugs to the right. b. The price elasticity of demand for illegal drugs is 1.3. c. The price elasticity of supply for illegal drugs is 0.8. d. As a result of the interdiction, the price of illegal drugs increases by 20 percent and the quantity of illegal drugs sold decreases by 16 percent.