"As Jake consumes more sodas over the course of a day, it is likely that his marginal rate of substitution of sodas for other goods will rise." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is incorrect. The principle of diminishing marginal rate of substitution means that as Jake consumes more sodas, he is willing to give up fewer other goods in order to get an additional soda.
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Use the following graph of the demand for noodles to answer the question below.
Refer to the three demand curves for noodles. Which of the following would shift the demand for noodles from D1 to D2?
A. an increase in the number of buyers of noodles B. People hear that eating noodles can have negative health effects. C. a decrease in the price of noodles D. a decrease in the number of buyers of noodles
Which of the following is most likely to have an income elasticity of demand that is less than 1?
A) movies B) airline travel C) foreign travel D) food E) restaurant meals
The linear stages theory of economic growth fails to recognize that increased investment is
a. both a necessary and a sufficient condition. b. a necessary but not a sufficient condition. c. a sufficient but not a necessary condition. d. neither a necessary nor a sufficient condition.
The study of development economics is to understand
A. why most of the patents on record have been given to men rather than to women. B. why some products are successful in the market as soon as they are developed, whereas others do not catch on for years. C. why some countries are rich and others are poor. D. the personality factors that lead people to become entrepreneurs.