Part A)“I like ice cream, but after eating homemade ice cream last night, I want
ID: 1162841 • Letter: P
Question
Part A)“I like ice cream, but after eating homemade ice cream last night, I want to have something else for desert today.” This statement most clearly reflects
the law of demand.
the law of diminishing returns.
the law of diminishing marginal utility.
the law of increasing costs.
Pard B)
For a firm’s decision-making, the principal-agent problem arises when
the principal and the agent have different objectives.
the agent cannot enforce the principal to manage well.
there are too many principals but only few agents.
the agent considers to maximize the firm’s wealth
A.the law of demand.
B.the law of diminishing returns.
C.the law of diminishing marginal utility.
D.the law of increasing costs.
Explanation / Answer
a) "C"
The law of the diminishing marginal utility. It says with other things constant the more we consume one product the less utility we get from an additional unit of that product.
b) "A"
It arises when the Agent and principal have different incentives and different objectives.