Answer the following statement(s) true (T) or false (F)
1. You can increase your total satisfaction by buying goods with lower marginal utility at a higher price.
2. Sometimes when you buy additional units of one good and its marginal utility decreases, the marginal utility of the goods you did not buy increases.
3. If marginal utility is held constant, consumer equilibrium can be maintained even if the price of certain goods fall.
4. Behavioral economics draws on human psychology.
5. Behavioral economists assume consumers are always rational and informed.
1. False
2. True
3. False
4. True
5. False
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In a free market for rental housing, effective rent control would have which effect?
a. It would cause a reduction in the number of apartments. b. It would cause an increase in the number of apartments, since landlords would try to increase their profits through larger scale. c. It would have no effect on the number of apartments offered in the market. d. The results are impossible to predict.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.