Author Question: Because incomes are limited, purchasing one thing means not being able to purchase other things. ... (Read 46 times)

rachel9 · **on:** Jun 30, 2018

Because incomes are limited, purchasing one thing means not being able to purchase other things. This indicates that:
a. marginal utility diminishes.
b. marginal utility is constant.
c. people will allocate their income among goods so as to achieve the most satisfaction.
d. people will allocate their income among goods so that the marginal utilities of all goods is equal.
e. people will allocate their income among goods so that the marginal utilities of all goods is zero.

Question 2

A firm's total fixed cost equals 2,500 . The firm's average fixed cost at 1, 5, and 10 units of output, respectively, will be:
a. 2,500, 2,500, and 2,500.
b. 2,500, 500, and 250.
c. 2,500, 12,500, and 25,000.
d. 2,500, 1,250, and 250.