Marginal Utility
If marginal utility is negative, we can infer that Question 1 answers | | total utility is increasing by smaller and smaller amounts | | | total utility has fallen | | | total utility is also negative / | | | the product is an inferior good |
A utility-maximising consumer changes their expenditures until Question 2 answers | | MUX = MUY for all pairs of goods / | | | TUX/PX = TUY/PY for all pairs of goods / | | | MUX/MUY = PX/PY for all pairs of goods/ | | | PX (MUX) = PY(MUY) for all pairs of goods |
The difference between the maximum amount a person is willing to pay for a good and its current market price is known as Question 4 answers | | consumer surplus / | | | the substitution effect | | | profits | | | marginal utility |
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Which of the following is NOT a property of an indifference curve? Question 5 answers | | An indifference curve is convex to the origin / | | | The consumer is indifferent between any two points on an indifference curve / | | | The marginal rate of substitution diminishes as you move down the indifference curve | / | | As you move from one indifference curve to another indifference curve closer to the origin, utility increases |
An indifference curve is Question 6 answers | | the set of all points of consumer equilibrium as the consumer’s income changes / | | | the set of all goods that the consumer can afford given her income and the prices of the goods / | | | all combinations of goods X and Y that yield the same total utility / | | | all combinations of goods X and Y that yield the same marginal utilit |
As long as indifference curves are convex to the origin, utility maximisation will take place
A utility-maximising consumer changes their expenditures until Question 2 answers | | MUX = MUY for all pairs of goods / | | | TUX/PX = TUY/PY for all pairs of goods / | | | MUX/MUY = PX/PY for all pairs of goods/ | | | PX (MUX) = PY(MUY) for all pairs of goods |
The difference between the maximum amount a person is willing to pay for a good and its current market price is known as Question 4 answers | | consumer surplus / | | | the substitution effect | | | profits | | | marginal utility |
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Which of the following is NOT a property of an indifference curve? Question 5 answers | | An indifference curve is convex to the origin / | | | The consumer is indifferent between any two points on an indifference curve / | | | The marginal rate of substitution diminishes as you move down the indifference curve | / | | As you move from one indifference curve to another indifference curve closer to the origin, utility increases |
An indifference curve is Question 6 answers | | the set of all points of consumer equilibrium as the consumer’s income changes / | | | the set of all goods that the consumer can afford given her income and the prices of the goods / | | | all combinations of goods X and Y that yield the same total utility / | | | all combinations of goods X and Y that yield the same marginal utilit |
As long as indifference curves are convex to the origin, utility maximisation will take place