Answer the following statement true (T) or false (F)
1) If marginal utility is diminishing, total utility must also be declining.
2) Marginal utility is total utility divided by the number of units consumed.
3) When total utility is at a maximum, marginal utility is zero.
4) When a consumer shifts purchases from X to Y, the marginal utility of X falls and the marginal
utility of Y rises.
1) F
2) F
3) T
4) F
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If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, one possible factor that might have led to this change is
A) an increase in the U.S. interest rate. B) a decrease in the European interest rate. C) the Fed buying dollars. D) the Fed selling dollars. E) an increase in the expected future exchange rate.
Which of the following is not a reason to be cautious about using GDP as an indicator of development?
a. Developing countries may not have many statisticians. b. GDP includes the value of harmful products. c. Many goods and services are exchanged for others and are not recorded as having a specific value. d. Traditional methods of comparing countries' GDP data have numerous statistical weaknesses. e. All of the above are reasons for caution.