What is the principle of diminishing marginal utility?
What will be an ideal response?
The principle of diminishing marginal utility is that as more of any good is consumed the extra satisfaction derived declines. Increases in total utility from the consumption of a good becomes smaller and smaller as more of the good is consumed in a given time period.
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In the above figure, the economy is at point A. Then the price level falls to 90 while the money wage rate does not change. Firms will be willing to supply output equal to
A) less than $16.0 trillion. B) $16.0 trillion. C) more than $16.0 trillion. D) Without more information, it is impossible to determine which of the above answers is correct.
Supply curves generally slope upward because of all of the following reasons except one. Which is the exception?
a. Producers are willing to offer more of a good at higher prices. b. A higher price attracts resources from less-valued uses. c. Producers must be compensated for the rising opportunity cost of additional output. d. Producers have a greater incentive to sell more as the price increases. e. The price of a good usually must fall to induce an increase in quantity supplied.
An information product typically has
A. low total fixed costs and low marginal costs. B. low total fixed costs and high marginal costs. C. high total fixed costs and low marginal costs. D. high total fixed costs and high marginal costs.
Explain the Phillips Curve concept and construct an example of the curve on the below graph.
What will be an ideal response?