The Explanation for the Law of Demand Begins with

question 218

Multiple Choice

The explanation for the law of demand begins with

• A)a small number of wants satisfied by scarce resources
• B)finite wants satisfied by infinite resources
• C)unlimited wants confronting scarce resources
• D)unlimited wants matching up with unlimited resources
• E)prices acting as signals to existing and potential suppliers

Understand the relationship between isoquants, isocost lines, and the firm's production costs.

Analyze the marginal rate of technical substitution and its significance.

Recognize the geometric representation of production costs, including total cost, on graphs.

Identify how different levels of output affect the position of isoquants on a graph.

---

Definitions:

Disposable Income

The amount of income left for spending or saving after taxes have been paid.

C + I

Represents the sum of consumer spending (C) and investment spending (I) in an economy's GDP formula.

Capacity Utilization Rate

A metric used to measure the degree to which a firm or economy is operating at its full potential or maximum efficiency.

Investment

The action or process of allocating resources, usually money, in order to generate income or profit.