The law of diminishing marginal utility explains why
A. most individual demand curves are straight lines.
B. the consumer’s optimal purchase is at the tangency of an indifference curve and the budget line.
C. most individual demand curves slope downward.
D. marginal utility falls when total utility falls.
Answer: C
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The income effect of a price increase for a Giffen good outweighs the substitution effect
Indicate whether the statement is true or false
Over the past year, productivity grew 1%, capital grew 2%, and labor grew 2%. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did output grow?
A) 1% B) 2% C) 3% D) 4%
Which of the following costs do not vary with the amount of output a firm produces?
a. average fixed costs b. fixed costs and average fixed costs c. marginal costs and average fixed costs d. fixed costs
If the demand for baseballs increases, then as a result, it is highly likely that the demand for:
A. leather will increase. B. tennis balls will increase. C. soccer balls will rise. D. bats will decrease.