How does the law of demand reflect the law of diminishing marginal utility?
The law of demand states that when the price of a good is reduced, the quantity of that good demanded will increase. At lower prices, consumers will buy more because they are getting relatively more satisfaction for each dollar spent on a good.
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Define free markets. Does a perfectly competitive market qualify as a free market?
What will be an ideal response?
Make an argument for user charges being both efficient and equitable. What information can user charges provide us that free provision can not?
What will be an ideal response?
Explain why the LDCs are unable to invest much in capital goods and human capital
Expansionary monetary policy _______________ Real GDP ______________ in an open economy than in a closed economy
A) raises; more B) raises; less C) lowers; more D) lowers; less