Moving downward along an indifference curve causes a(n)
A. reduction in the total utility a consumer receives.
B. loss in the marginal utility of one good but an equal increase in the marginal utility of the other good.
C. increase in the marginal utility of both goods.
D. decrease in the price of one good and an increase in the price of the other good.
Answer: B
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a) there is a technological advance. b) the price of the variable input decreases. c) the price of the variable input increases. d) there is an increase in fixed cost. e) the price of output increases.
New classical economists say that a fully anticipated decrease in aggregate demand:
A. shifts the long-run aggregate supply curve to the right. B. shifts the long-run aggregate supply curve to the left. C. moves the economy down along its vertical long-run aggregate supply curve. D. eventually results in a self-correcting increase in aggregate demand.
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