Brad ate four bags of chips at the baseball game. The first bag tasted best, but he found that as he ate more chips the amount of extra satisfaction he was receiving was beginning to fall. This would demonstrate
A) the law of total utility maximization.
B) the law of zero utility.
C) the law of diminishing marginal utility.
D) the law of diminishing costs.
Answer: C
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Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Firm X ($/day) $500$514$530$555$585 Cost to Firm Y ($/day) $400$420$445$480 $520Cost to Firm z ($/day) $300$325$360$400 $550It would cost Firm X ________ to reduce emissions by one ton if it currently emits 3 tons, and ________ to reduce emissions by one ton if it currently emits 2 tons.
A. $14; $25 B. $14; $16 C. $30; $55 D. $16; $25
In the aggregate expenditures diagram, the 45° line represents the equilibrium condition that
A. Y* = Y. B. AE = C + I + G + NX. C. I = C. D. Y = AE.
Which of the following statements is TRUE?
A) Labor is always a variable input. B) Capital is always a fixed input. C) Materials are always variable inputs. D) None of the above.
When is demand said to be inelastic?
a) if the quantity demanded changes only slightly when the price of the good changes b) if demand shifts only slightly when the price of the good changes c) if buyers respond substantially to changes in the price of the good d) if the price of the good responds only slightly to changes in demand