QUESTION 18 According to the law of diminishing marginal utility 1. as the consu
ID: 2439076 • Letter: Q
Question
QUESTION 18
According to the law of diminishing marginal utility
1.
as the consumption of a given product rises, the added benefit eventually diminishes
2.
as the production cost for a given product rises, the added benefit eventually diminishes
3.
the demand curve for some products is upward-sloping
4.
as the price of a given product rises, the added benefit eventually diminishes
QUESTION 19
The demand for a product tends to be inelastic if
1.
it is expensive
2.
a small proportion of consumer's income is spent on the good
3.
consumers are quick to respond to price changes
4.
it has many substitutes
QUESTION 20
Two products are complements if the
1.
cross-price elasticity of demand is less than zero
2.
cross-price elasticity of demand equals zero
3.
cross-price elasticity of demand is greater than zero
4.
price elasticity of demand for each good is greater than zero
QUESTION 21
The law of diminishing returns
1.
deals specifically with the diminishing marginal product of fixed input factors
2.
states that the marginal product of a variable factor must eventually decline as increasingly more is employed
3.
can be derived deductively
4.
states that as the quantity of a variable input increases, with the quantities of all other factors being held constant, the resulting output must eventually diminish
QUESTION 22
The returns to scale characteristic of a production system
1.
is measured by the way in which inputs can be varied in an unbroken marginal fashion rather than incrementally
2.
illustrates the distinct, or "lumpy," pattern of input combination
3.
shows the relation between output and the variation in all inputs
4.
is the relation between output and variation in only one of the inputs employed
1.
as the consumption of a given product rises, the added benefit eventually diminishes
2.
as the production cost for a given product rises, the added benefit eventually diminishes
3.
the demand curve for some products is upward-sloping
4.
as the price of a given product rises, the added benefit eventually diminishes
Explanation / Answer
QUESTION 18
According to the law of diminishing marginal utility
1.
as the consumption of a given product rises, the added benefit eventually diminishes
As per the law when the consumer consumes more of a commodity the marginal utility of the additional unit decreases.
QUESTION 19
The demand for a product tends to be inelastic if
2.
a small proportion of consumer's income is spent on the good
When the consumer spent a small proportion of his income, the demand will be inelastic.
QUESTION 20
Two products are complements if the
1.
cross-price elasticity of demand is less than zero
In case of complementary goods the cross price elasticity will be negative or less than zero.
QUESTION 21
The law of diminishing returns
4.
states that as the quantity of a variable input increases, with the quantities of all other factors being held constant, the resulting output must eventually diminish
Diminishing returns applicable in short run where the producer can increases the variable factors to produce more keeping the fixed factors constant. It states that when quantity of a variable input increases, with the quantities of all other factors being held constant, the resulting output must eventually diminish.
QUESTION 22
The returns to scale characteristic of a production system
3.
shows the relation between output and the variation in all inputs
It is applicable in long run where all factors are variable.
1.
as the consumption of a given product rises, the added benefit eventually diminishes
As per the law when the consumer consumes more of a commodity the marginal utility of the additional unit decreases.