A) the marginal utility from the consumption of each unit of the good and the total utility from consuming larger quantities increase.
B) the marginal utility from the consumption of each unit of the good and the total utility from consuming larger quantities remain constant.
C) the marginal utility from the consumption of each unit of the good falls and the total utility from consuming larger quantities increases.
D) the marginal utility from the consumption of each unit of the good rises and the total utility from consuming larger quantities remain constant.
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A) negative.
B) zero.
C) positive.
D) positive, negative or zero.
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A) deciding on the basis of sunk costs.
B) buying something you can't really afford because you expect to save in the future.
C) ignoring opportunity costs.
D) consuming based on celebrity endorsements.
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A) cannot decrease as a person consumes more and more of a good.
B) has a constant rate of increase as a person consumes more and more of a good.
C) is equal to the sum of the marginal utilities of all units consumed.
D) is negative when marginal utility is declining.
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A) People measure the value of a good in terms of its purchase price.
B) Even though sunk costs cannot be recovered, it has been incurred and therefore should be treated as part of the product's value.
C) If consumers maximize their utility, it makes sense to consider the full purchase price of a product in their consumption decisions.
D) Sunk costs have a higher opportunity cost than costs that can be recovered.
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A) do as little work as possible to survive.
B) make themselves as well off as possible.
C) expend all their income.
D) consume as much as possible.
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A) car buyers are irrational.
B) the total utility of less expensive cars is greater than that of luxury cars.
C) the marginal utility per dollar spent on the less expensive car is higher than that spent on luxury cars.
D) luxury cars cost a lot more than non-luxury cars.
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A) are theoretical and have never been discovered in the real world.
B) have not existed since prior to the Industrial Revolution.
C) were proven to exist in the 1890s by Sir Robert Giffen.
D) were not shown to actually exist until 2006.
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A) the income effect which causes you to reduce your corn purchases is smaller than the substitution effect which causes you to increase your corn purchases, resulting in a net increase in quantity demanded.
B) the income effect which causes you to increase your corn purchases is larger than the substitution effect which causes you to reduce your corn purchases, resulting in a net increase in quantity demanded.
C) both the income and substitution effects reinforce each other to increase the quantity demanded.
D) the income and substitution effects offset each other but the price effect of an inferior good leads you to buy less corn.
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Network externalities can create signifi...View Answer
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A) there is production cost savings from being networked with suppliers.
B) there is production cost savings from being networked with buyers.
C) the usefulness of a good is affected by how many others use the good.
D) the usefulness of a good is affected by celebrities who use the good.
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