The fact that a gallon of gasoline commands a higher market price than a gallon of water indicates that:
A. gasoline is an economic good but water is not.
B. the marginal utility of gasoline is greater than the marginal utility of a gallon of water.
C. the average utility of a gallon of gasoline is greater than the average utility of a gallon of water.
D. the total utility of gasoline exceeds the total utility of water.
Answer: B
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In a perfectly competitive market, an increase in market demand
A) raises the price in the short run and attracts new firms in the long run. B) raises the price in the short run and the long run. C) lowers the price in the short run and in the long run. D) has no effect on the price in either the short run or the long run because the firms are price takers.
The term structure is usually defined with yields on which securities?
A) corporate bonds B) commercial paper C) U.S. Treasury securities D) municipal bonds