The word "util" has been used by economists in the past as an objective measure of utility. Today economists believe that
A) utility cannot be measured objectively.
B) utility can be measured objectively because people can use prices of different goods to measure utility.
C) all of the important conclusions of the economic model of consumer behavior depend on utility being measured objectively.
D) the util truly is an objective, rather than a subjective, measure of utility.
Answer: A
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If all fixed taxes in the United States were removed and only variable taxes remained, what would be the effect on the expenditures schedule?
a. The expenditure schedule will shift upward. b. The expenditure schedule will shift downward. c. The expenditure schedule will become flatter. d. The expenditure schedule will become steeper.
Franklin buys a bottle of his favorite brand of Scotch every Friday on his way home from work. A new tax means the price of the bottle has increased. Franklin could buy fewer bottles of Scotch, but he might also choose to:
a. calculate how many utils he gets per glass from a bottle. b. create a demand curve that demonstrates ceteris paribus. c. switch to drinking bourbon. d. cut back on a different expense so he can pay the higher price of the Scotch.