If the price of product X rises, then the resulting decline in the amount purchased will:
A. necessarily increase the consumer's total utility from his total purchases.
B. increase the marginal utility of the last unit consumed of this good.
C. increase the total utility from purchases of this good.
D. reduce the marginal utility of the last unit consumed of this good.
Answer: B
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Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the short run
A) the unemployment rate can increase or decrease depending upon how much the LRAS will shift. B) the unemployment rate will be smaller than the rate before the expansionary monetary policy. C) the unemployment rate will be larger than the rate before the expansionary monetary policy. D) the unemployment rate will be the same rate as before the expansionary monetary policy.
If the marginal external cost of building a children's playground equals zero, then the
A) marginal private cost equals the marginal social cost. B) marginal social cost equals zero. C) marginal private cost equals zero. D) None of the above answers is correct.