How does the law of demand reflect the law of diminishing marginal utility?
The law of demand states that when the price of a good is reduced, the quantity of that good demanded will increase. At lower prices, consumers will buy more because they are getting relatively more satisfaction for each dollar spent on a good.
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Suppose that the income elasticity of demand for fresh vegetables is 0.26 . If buyers' incomes rise by 10 percent, then
a. the demand curve for fresh vegetables will shift to the left b. the quantity of fresh vegetables demanded will rise by 2.6 percent c. the quantity of fresh vegetables demanded will rise by 12.6 percent d. there will be a movement down and to the right on the demand curve for fresh vegetables e. there will be a movement up and to the left along the demand curve for fresh vegetables
Comparative advantage indicates that:
A. specialization and exchange will permit trading partners to maximize their joint consumption. B. a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods. C. a nation can gain from trade only when its trading partners are not low-wage countries. D. countries should export products for which they are high-opportunity cost producers.