The Table Below Shows the Total Utility Associated with Various

question 73

Multiple Choice

The table below shows the total utility associated with various units of goods X and Y.Table 7.5

-The demand curve for a product slopes downward and to the right because:

• A)total utility decreases as more of the product is consumed.
• B)total utility derived from both, the product and its substitutes is the same.
• C)marginal utility of the product diminishes as more of the product is consumed.
• D)there are no substitutes for the product.
• E)when the price falls, the income effect causes consumers to buy less of the product.

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Definitions:

Diseconomies of Scale

The phenomenon where production costs increase as a firm expands output, leading to reduced efficiency.

U-Shaped Long-Run Average Cost Curve

This describes the phenomenon where, over time, average costs first decrease with increased production, hit a minimum, and then increase with further production increase, forming a U-shape.

Minimum Cost

The lowest possible expense at which a particular set of goods or services can be produced or acquired.

Long-Run Average Cost Curve

A graphical representation showing how the average cost of production changes as the scale of production is altered over the long term, reflecting economies and diseconomies of scale.