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.
b
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The real rate of interest is
A) equal to the nominal rate of interest less the anticipated rate of inflation. B) equal to the nominal rate of interest plus the anticipated rate of inflation. C) found by taking the nominal rate of interest and dividing it by the actual rate of inflation. D) found by taking the nominal rate of interest and adding the actual rate of inflation.
Supply shows
a. the quantity offered for sale at every possible price. b. the quantity people will buy at every possible price. c. the changes in quantity. d. how price changes when people buy more.