Consumers do NOT buy as many units of each good as they want because
A. they do not know what they want in all situations.
B. of the law of diminishing marginal utility.
C. they have limited incomes.
D. eventually marginal utility equals zero.
Answer: C
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According to the Keynesian model, real wages should
A) remain constant. B) fall during recessions. C) rise during recessions. D) stay the same during recessions but rise during expansions.
Cooling systems II Carl is the lead engineer on a smart HVAC cooling system that works with minimal energy and is voice activated. Given the revolutionary nature of the system, it took many failed tries to create a system that actually worked, a cost of
$30,000 . Now each unit sells for $6500 and it costs $5000 in raw materials and labor to produce. Carl receives an order for four new units for a customer, but when he takes the order to his manager, the manager is enraged and asks Carl why he wanted to produce something at a loss. What costs would the manager be looking at to come to this conclusion?
A production possibilities curve has "good X" on the horizontal axis and "good Y" on the vertical axis. On this diagram, the opportunity cost of good X, in terms of good Y, is represented by the:
a. distance to the curve from the horizontal axis. b. distance to the curve from the vertical axis. c. distance from the origin to the curve. d. change in Y for each change in X along the curve.
If the domestic income of a nation's citizens increase, then we might expect net export spending to:
A. remain constant. B. increase. C. decrease. D. there is not enough information to determine what would happen.