Consumers Do Not Buy as Many Units of Each Good

question 302

Multiple Choice

Consumers do not buy as many units of each good as they want because

• A) of the law of diminishing marginal utility.
• B) they have limited incomes.
• C) they do not know what they want in all situations.
• D) eventually marginal utility equals zero.

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Definitions:

Rent Controls

A restriction set by authorities on how much landlords can demand for renting out houses or apartments.

Long Run

An economic term for a timeframe in which all factors of production and costs are variable, allowing for full adjustment to changes.

Nominal Growth Rate

The rate at which an economy or financial metric grows over time, including inflation, without adjusting for the latter.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, reflecting the purchasing power of currency.