Given the utility-optimizing rule and the presence of diminishing marginal utility for a good
A. the demand curve for the good will be vertical.
B. there will not be a substitution effect.
C. the demand curve for the good will be negatively sloped.
D. there will not be a well-defined demand curve.
Answer: C
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The data show that an individual's wealth tends to first increase and then to decrease over the person's lifetime
Indicate whether the statement is true or false
Countries that experience very high rates of inflation may also have
A) balanced budgets. B) rapidly growing money supplies. C) falling money supplies. D) constant money supplies.
The idea that firms retain some workers in a recession, whom they would otherwise lay off, to avoid the costs of hiring and training, is called
A) the gift exchange motive. B) worker pooling. C) labor hoarding. D) union busting.
Lenders prefer to lend to firms with high net worth because
A) such firms are usually willing to pay higher interest rates. B) the owners of such firms have more to lose if the firm defaults on a loan. C) the government requires most bank loans to be made to such firms. D) such firms usually are unable to raise funds directly through financial markets.