Refer to the Figure Below A) Applies to Good a but Not Good B

question 126

Multiple Choice

Refer to the figure below. The law of diminishing marginal utility: $$\begin{array} { | c | c | c | } \hline \text { Units } & \begin{array} { c } \text { Marginal Utility } \\\text { of Good A }\end{array} & \begin{array} { c } \text { Marginal Utility } \\\text { of Good B }\end{array} \\\hline 1 & 30 & 40 \\\hline 2 & 27 & 33 \\\hline 3 & 15 & 24 \\\hline 4 & 8 & 14 \\\hline\end{array}$$

• A) applies to Good A but not Good B.
• B) does not apply to either Good A or Good B.
• C) applies to Good B but not Good A.
• D) applies to both Good A and Good B.

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Definitions:

Perfectly Competitive

A theoretical market structure characterized by an infinite number of buyers and sellers, identical products, and no barriers to entry or exit.

Price Equals

A statement used to define a condition where the price of a good or service is set or found.

Efficient Markets

A theory that suggests that financial markets fully reflect all available information at any given time, making it impossible to consistently achieve higher returns.

Investment Capital

Funds invested in a business for the purpose of furthering its operations and generating income or profit.