If the marginal utility of each good consumers buy does not diminish but remains constant, we should witness consumers:
a. buying no goods at all.
b. spending all of their income on the good with the highest MU.
c. buying one of each good.
d. buying only the least expensive goods.
e. become indifferent to what goods they buy.
b
Economics
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A decrease in supply _____ price and _____ the quantity sold.
Fill in the blank(s) with the appropriate word(s).
Economics
Suppose that real GDP is initially $20 trillion and the government attempts to increase real GDP to $21 trillion. The marginal propensity to consume is 0.8, and every $1.00 increase in real government spending crowds out $0.50 in real planned investment expenditures. Which increase in government spending below could yield the desired level of real GDP?
A. $400 billion B. $200 billion C. $125 billion D. $100 billion
Economics