1-One reason that variable factors of production tend to show diminishing returns in the short run is that:
-large firms cannot effectively manage their resources.
-the cost of employing additional resources increases as firms employ more of thsoe resources.
-capital equipment is often idel in the short run.
-there is only so much that can be produced using additional variable inputs when some factors of production are fixed.
2-Suppose that at your current consumption of two goods, a & b, that your MUa/Pa = 25 utils/dollar and your MUb/Pb = 20 utils/dollar. In order to maximize your utility you should:
-Consume more of good a than you do of good b
-Decrease the amount of a and increase the amount of b
-Increase the amount of a and decrease the amount of b
-Consume less of good a than you do of good b
-Change nothing as you are maximazing your utility already
3-When the price of a good rises, marginal utility per dollar spent on that good _______, leading consumers to purchase ______ of that good.
4-According to the Law Of Diminishing Utility:
-you should never consume more of something if your maginalutility is decreasing.
-as you consume less of something, your total utility will decrease.
-as you consume less of something, your marginal utility from consuming that good will increase.
-if your total utility is increasing as you consume more of something, then your marginal utility must be increasing as well.