Question

Maria buys several cups of coffee every day between classes. The first cup of coffee always tastes wonderful. The second does not taste quite as good as the first. The third does not taste quite as good as the second. Maria is experiencing

A.

the coffee drinker’s paradox.

B.

the elasticity of demand.

C.

the law of diminishing marginal utility.

D.

irrational behavior.

1. When a person buys stock in a company, that person is buying ________, but when a person buys a bond in a company, that person is ________ the company.

   	A.	ownership; lending funds to
   	B.	debt; borrowing funds from
   	C.	debt; lending funds to
   	D.	ownership; borrowing funds from

1 points   

QUESTION 5

1. Suppose there are 100 million people in the labor force of which 6 million are unemployed. During the next month, 200,000 people lose their jobs and 300,000 find jobs. The new total number of employed people is ____.

   	A.	100.3 million
   	B.	94.1 million
   	C.	94.3 million
   	D.	100.1 million

Answer 1

1. Maria is experiencing law of diminishing marginal utility because her utility of consuming every next cup of coffee is falling as she every next cup of coffee doesn't taste as good as the previous one. Hence, option c is correct.

A is incorrect because coffee drinker paradox does not mean the fall in the utility of consuming every next unit. B is also incorrect because elasticity of demand is the percentage change in quantity demanded due to percentage change in price. D is incorrect because irrational behaviour means not maximising utility while making out various decisions.