The law of diminishing marginal utility helps explain:
a. why most individual demand curves are straight lines.
b. why most supply curves slope upward
c. why most individual demand curves slope downward.
d. why marginal utility falls when total utility falls.
c
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Consider the income and substitution effects corresponding to an increase in the price of X. Which of the following are not possible?
a. The substitution effect on X is positive and the income effect is negative. b. The substitution effect on X is positive and the income effect is negative. c. The substitution effect on Y is negative and the income effect on X in negative. d. The income effect on both goods is positive.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Based on the figure above, short-run equilibrium occurs at the price level of
A) 120 and real GDP of $5 trillion. B) 130 and real GDP of $10 trillion. C) 140 and real GDP of $15 trillion. D) 130 and real GDP of $15 trillion.
Which of the following is characteristic of DVCs?
A. A large percentage of the labor force is in agriculture. B. High levels of saving and investment. C. High labor productivity. D. High levels of training.