What does "diminishing marginal utility" mean?
What will be an ideal response?
As the consumption of a good or service increases, the marginal utility decreases. For example, the first cup of coffee you drink in the morning will give you great satisfaction. As you keep on drinking more and more cups of coffee, the satisfaction from additional cups will diminish.
You might also like to view...
There is no trade-off between inflation and unemployment when expectations are ________ and policy changes are ________
A) adaptive; anticipated B) adaptive; unanticipated C) rational; anticipated D) rational unanticipated
In the game in Scenario 13.7, the strategy pair that pays
A) $69,000 to each player is the only equilibrium. B) ($0, -$1000 ) is the only equilibrium. C) (-$1000, $0 ) is the only equilibrium. D) $0 to each player is the only equilibrium. E) $69,000 to each player and the strategy pair that pays $0 to each player are equilibria.
When economists say that private investment is "autonomous," they mean that it:
a. will never change. b. is not dependent on the current level of disposable income. c. is determined by the "animal spirits" of business decision makers. d. is determined by the level of saving.
A normative statement is descriptive—it describes what happens and why it happens
a. True b. False Indicate whether the statement is true or false