Which of the following is explained by the law of diminishing marginal utility?
A) The marginal utility of Isabel's second bottle of Coca-Cola is greater than the marginal utility of her friend Margie's third pretzel.
B) The marginal utility of Isabel's second bottle of Coca-Cola is greater than the marginal utility of her third pretzel.
C) The total utility of one bottle of Coca-Cola is greater than the total utility of two bottles of Coca-Cola.
D) The marginal utility of Isabel's second bottle of Coca-Cola is greater than the marginal utility of her third bottle of Coca-Cola.
D
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Suppose the market supply curve is p = 5 + Q. At a price of 10, producer surplus equals
A) 50. B) 25. C) 12.50. D) 10.
Indifference curves are convex to the origin because of:
A) transitivity of consumer preferences. B) the assumption of a diminishing marginal rate of substitution. C) the assumption that more is preferred to less. D) the assumption of completeness. E) none of the above
If national income increases by $20 million and consumption increases by $5 million, the marginal propensity is consume is
What will be an ideal response?
Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 10 percent,
A. the lender benefits from inflation, while the borrower loses from inflation. B. the borrower benefits from inflation, while the lender loses from inflation. C. neither the borrower nor the lender benefits from inflation. D. both the borrower and the lender lose from inflation.