1. An increase in the real income of a consumer is one result from an increase in the price of a product that the consumer is buying.
True
False
2. A consumer is making purchases of products Alpha and Beta such that the marginal utility of product Alpha is 30 and the marginal utility of product Beta is 40. The price of product Alpha is $5 and the price of product Beta is $10. The utility-maximizing rule suggests that this consumer should:
A. Increase consumption of product Beta and decrease consumption of product Alpha.
B. Increase consumption of product Beta and increase consumption of product Alpha
C. Increase consumption of product Alpha and decrease consumption of product Beta
D. Make no change in the consumption of Alpha or Beta
3. The marginal rate of substitution of beef for chicken is the:
A. Number of units of chicken the consumer is prepared to give up to obtain one more unit of beef.
B. Number of units of beef the consumer is prepared to give up as income falls
C. Number of units of beef the consumer must sacrifice to obtain one more unit of chicken
D. Rate at which units of beef may be exchanged for units of chicken
4. The increase in demand for iPad tablet computers can be explained by:
A. An increase in the technology used to produce iPads, making the supply of iPads increase
B. An increase in the price of laptop computers, making their MU/P decrease
C. The enhanced versatility and storage capacity of iPads, making their MU/P increase
D. An increase in the income of buyers, making the demand for iPads increase.
5.If total utility increases as consumption of a good increase, then marginal utility must be increasing also.
True
False