Why does the marginal benefit curve have a negative slope?
What will be an ideal response?
Each successive increase in the consumption of any good or service provides a lower level of satisfaction, or benefit, than the preceding unit of consumption. For a specific example, think of drinking water on a hot day. What is the first glass worth? How about the second and third? The marginal benefit is the benefit from each additional glass of water and, as the example indicates, the marginal benefit decreases as the amount of the good increases.
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When the price level rises
a) firms will spend less on new business buildings and business equipment and households will want to spend less building new homes. b) the interest rate falls because people will want to hold more money and so sell bonds. c) the interest falls because people will want to hold less money and so buy more bonds. d) firms will spend more on new business buildings and business equipment and households will want to spend more on building new homes.
Since the mid-1980s, the United States has been a net ________ and a ________ nation
A) borrower; creditor B) lender; creditor C) borrower; debtor D) lender; debtor