The law of diminishing marginal utility applies to a
Firm which minimizes cost
Consumer who maximizes satisfaction
Producer who maximizes marginal product
Consumer who minimizes total utility
Correct answer is B
The law of diminishing marginal utility states that the marginal utility of a good or service declines as its consumption increases. This means that, as a consumer keeps consuming additional units of a commodity, the additional satisfaction derived will keep decreasing (goods become less valuable as you continue consuming more of it)
Why is the law of diminishing returns a short run phenomenon?
All inputs are fixed
All inputs are variable
Some outputs are variable
Some inputs are variable
Correct answer is A
The law of diminishing returns states that as an increasing amount of a variable factor is added to a fixed factor, the marginal product of the variable factor may at first rise but must eventually fall.
The law of diminishing returns applies in the short run because only then is some factor fixed.
88 utils
18 utils
5.5 utils
3.5 utils
Correct answer is C
Average utility will be the total utility derived form the consumption of a commodity divided by the number of units consumed. Thus we have;
22 ÷ 4 = 5.5 utils
Given the demand function Qd = 20 - 1/ 2P. What is Qd when P is $12?
6 units
10 units
12 units
14 units
Correct answer is D
No explanation has been provided for this answer.
The allocation of goods and services in a free market economy is performed by
The price system
The banking system
The central planning body
Government budgets
Correct answer is A
In a free market economy, the price mechanism regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services.