A consumer should increase his/her consumption of good Y relative to good X if:
A. the marginal benefit per dollar spent on good X is greater than the marginal benefit per dollar spent on good Y.
B. the marginal benefit per dollar spent on good X is smaller than the marginal benefit per dollar spent on good Y.
C. the marginal benefit per dollar spent on good X is the same as the marginal benefit per dollar spent on good Y.
D. None of these
Answer: B
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Suppose early one Friday morning the economics club buys 200 donuts at 25 cents each, and plans to sell all of them later in day on campus for 50 cents each
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What happens when a firm encounters diminishing returns? What causes diminishing returns?
What will be an ideal response?
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