How are the law of demand and the law of diminishing marginal utility related?
a. The law of diminishing marginal utility explains the law of demand.
b. The law of demand explains the law of diminishing marginal utility.
c. The law of demand contradicts the law of diminishing marginal utility.
d. The law of diminishing marginal utility contradicts the law of demand.
a. The law of diminishing marginal utility explains the law of demand.
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Suppose Carmen buys ramen noodles. To determine whether ramen noodles are a normal or inferior good for her, we must observe how Carmen
A) responds to a change in the price of a substitute for ramen noodles. B) responds to a change in the price of a complement for ramen noodles. C) responds to a change in the price of ramen noodles itself. D) responds to a change in her income. E) responds to all of the above.
Limit pricing occurs when a firm sets price _________________.
The main cause of low per capita income is ________
A) a low level of capital B) a small workforce C) low productivity of capital and labor D) slow growth of capital and labor shares of income E) none of the above
Suppose the state legislature in your state imposes a state licensing fee of $100 per year to be paid by all firms that file state tax revenue reports. This new business tax:
A) increases marginal cost. B) decreases marginal cost. C) increases marginal revenue. D) decreases marginal revenue. E) none of the above