me elasticity is defined as the percentage change in: demanded divided by the percentage change in income. A quantity ocome divided by the percentage change in the quantity demanded. B. uantity demanded divided by the percentage change in the price of the product. ce of a product divided by the percentage change in the quantity a D. the price demanded 6. According to the law of diminishing marginal returns, when one or more inputs are fixed, a variable input (usually labor) is likely to have a marginal product that eventually: A. decreases as the level of input increase. B. increases as the level of input increase. remain the same as the level of input increase. first decrease and then increases as the level of input increase. C. D. The law of diminishing marginal utility states that as you consume more of a good: A. you want more and more of it. B. the benefit that you get from consuming the next unit increase. C. the benefit that you get from consuming the next unit decrease. D. the demand curve will have an increasing slope. When the price of good changes, its: A. supply curve will shift. B. demand curve will shift. C. quantity demanded will change. D. demand curve and supply curve will both shift. 7 8. 9. All of the following will cause demand to increase (shift to right) EXCEPT A. the price of substitute goods increases. B. consumer income falls. C. the price of complementary goods falls. D. future price are expcted to increase. 10. Marginal cost is defined as the: A. non-variable cost. B. minimum manufacturing cost. C. difference between fixed and variable cost. D. cost of producing an additional unit of output. 11. When a firm operates under conditions of pure competition, marginal revenue always equals: A. average fixed cost. B. one minus the elasticity of the market demand curve. C. price. D. total revenue