Explain what diminishing marginal utility is.
What will be an ideal response?
It is when marginal utility declines as consumption of a particular good increases.
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Suppose that tattoos gained immense popularity with retired people as well as college students. This gain in popularity best reflects which of the following influences on buying plans?
A) the price of a substitute good B) income C) expectations D) preferences E) the price of a complement good
When the price of one product falls,
a. consumers' real income will increase. b. consumers will buy less of that product. c. consumers will not change their buying patterns. d. consumers' real income will decrease.
Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This fact:
A. is an example of irrational behavior. B. implies that electronic media sources are displacing print sources for many consumers. C. contradicts the economic perspective. D. implies that, for most people, the marginal benefit of reading a second newspaper is less than the marginal cost.
Refer to the information provided in Figure 26.4 below to answer the question(s) that follow.
Figure 26.4Refer to Figure 26.4. During the 1990s, many firms in the United States were investing in new capital. If the economy was originally at Point A, this would have caused a movement to Point
A. E. B. B. C. C. D. D.