The principle that "as one input increases while the other inputs are held fixed, output increases at a decreasing rate" is known as the:
A. marginal principle.
B. principle of opportunity cost.
C. principle of diminishing returns.
D. spillover principle.
Answer: C
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When the price of a normal good decreases, the ________ can be divided between the ________, which keeps the best affordable point on the same indifference curve and the ________, which moves the best affordable point farther away from the origin
A) substitution effect; price effect; income effect B) price effect; income effect; substitution effect C) income effect; substitution effect; price effect D) price effect; substitution effect; income effect
Adding the quantities demanded by all consumers at every price will yield
A) the market-clearing price. B) the number of consumers. C) the total substitution effect from a price change. D) the market demand curve.