The law of diminishing marginal utility suggests that
a. total utility will begin to diminish
b. additional units of consumption will add less to total utility
c. consumers' wants are insatiable
d. most consumers will limit their consumption even when they earn high incomes
e. marginal utility diminishes faster than total utility as more goods are consumed
b. additional units of consumption will add less to total utility
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When a banker records how many dollars each of his borrowers owes the bank, money is serving as a
A. store of value. B. medium of exchange. C. legal tender. D. unit of account.
An increase in demand and a decrease in supply will lead to an
A. unambiguous increases in both price and quantity. B. unambiguous decreases in both price and quantity. C. an unambiguous increase in quantity, but the effect on price is indeterminate. D. an unambiguous increase in price, but the effect on quantity is indeterminate.
Bill owns "Bill's Home of Blues" a store that specializes in selling CDs and DVDs of blues musicians of the 1960s and 1970s. Bill took out a loan from his bank to pay for his store and its initial inventory
Bill pays the bank $900 per week for his loan. The $900 bank payment A) is a short-run implicit cost. B) is a fixed cost. C) is a variable cost. D) is a long-run implicit cost.
Suppose a bank has the following balance sheet:
Assets Liabilities Reserves $14,000 Deposits $100,000 Loans $90,000 Net Worth $4,000 If the required reserve ratio is 10 percent, how much excess reserves does the bank have? What is the maximum amount that the bank can expand its loans?