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harkovskaia [24]
3 years ago
15

What do the income effect, the substitution effect, and diminishing marginal utility have in common?

Business
1 answer:
Sveta_85 [38]3 years ago
3 0

Answer:

They all help explain the downsloping demand curve

Explanation:

The options to the question wasn't provided. The complete question can be in the attached image.

The demand curve slopes downward from left to right. This indicates that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

Income effect is a change in quantity demanded when real income change. Quantity demanded increases when real income increases and decreases when real income falls.

Substitution effect says that consumers would substituite to the consumption of a cheaper good when the price of a good originally consumed increases.

Diminishing marginal utility states that as consumption increases, utility derived from consumption falls and quantity demanded falls.

I hope my answer helps you

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utility

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When U.S. goods become more expensive relative to foreign goods, exports will __________ and imports will __________.
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fall, rise

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Joe was tired of working for other people. He had an idea to start his own ice cream business and wanted to set it up where he a
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Authority - Responsibility Balance & Incentive Development.

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8 0
2 years ago
Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and 6 units of good Y (priced a
allsm [11]

Answer:

Option A, buy less of X and more of Y is correct.

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\frac{MUx}{Px} =  \frac{MUy}{Py}

Thus, Option a. buy less of X and more of Y is correct.

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3 years ago
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