irm's cost minimization problem is most similar to inding the consumer's final bundle, in the context of a price chang Finding the consumer's initial bundle, in the context of a price chan finding the consumer's substitution bundle, in the context of a price
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- Which among the following is not true?Select one:a. None of the answers are correctb. When marginal utility declines, a higher price is needed to induce the consumer tobuy more of a particular productc. When marginal utility declines, a lower price is needed to induce the consumer tobuy more of a particular productd. All the answers are correcte. Utility maximizing rule and the demand curve are logically consistentHelp in deciding the correction answer 1. The Law of diminishing marginal utility explains why a. most individual demand curves are straight lines. b. the consumer;s optimal purchase is at the tangency of an indiffernce curve and the budget line. c. most individual demand curves slope downward d. marginal utility falls when total utility falls 2. when a firm's price cut produces a smaller than proportional increase in quantity demanded, the demand for its product is a. elastic b. inelastic c. of unit elasticity d. straight elastic 3. A good will tend to be more price elastic if it a. luxury good b. no close substitutes c. small part of the household budget d. is a necessityMarginal utility is defined as the increment to total utility that results from the consumption of one more unit of some good or service. The equation for marginal utility is: Group of answer choices The change in total utility / the change in quantity The change in total utility / the change in total revenue The change in quantity / the change in total utility Total revenue / quantity demanded
- Question 36 The rate of market substitution is: The consumer’s marginal utility The consumer’s total utility The slope of the indifference curve The slope of the budget lineMarket demand: (2)(1) Shows how much an individual consumer is willing and able to purchase ateach price;(2) Is the vertical summation of all the individual demand curves in the market;(3) Shows how much firms are willing to supply in the market at each price;(4) Shows the total utility derived from consuming each unit. N.B multiple choice questionFrank is purchasing products C and D in utility-maximizing amounts. If the price of C is $6 and the price of D is $3, then the marginal utility of D is twice that of C. the marginal utility of D is the same as that of C. the marginal utility of C is twice that of D. the relationship between the marginal utility of C and D cannot be determined.
- Diana loves to buy shoes. However, after buying 10 new pairs of shoes she realizes that the tenth pair didn't make her as happy as the first 9 pairs. Diana is: A)at the point of excess supply. B)at the point of increasing returns on marginal utility. C)at the point of diminishing marginal utility. D)at the point of excess demand.Coke and Pepsi are perfect substitutes. Initially the price of Coke is higher than the price of Pepsi, later on, Coke reduced its price and become equal to the price of Pepsi, then again after that - Coke re-reduced its price and Pepsi became costlier than Coke. Draw the consumer’s demand curve for Coke using the optimal bundlesChoose the best/correct answer. ___1. Anything that satisfied someone. A. Needs C. Desires B. Wants D. Willingness ___2. A place where buyers and sellers interact together. A. Social media C. Market B. Business Area D. Classified Ads ___3. It is the satisfaction derived from the consumption of a commodity. A. Total utility C. Disutility B. Marginal utility D. Utility ___4. It is the change of total utility over the change of quantity. A. Total utility C. Disutility B. Marginal utility D. Utility ___5. It is the foregone value when a firm is engaged in production. A. Cost C. Revenue B. Profit D. Interest
- Advertisement is one of the factors that influence customers to increase demand for a specific good. Explain how the budget line shift due to price change of good Y when the price of good X remains the same.If a rational consumer is in equilibrium, then: a. the marginal utility obtained from one product is equal to the marginal utility obtained from any other product. b. the marginal utility per last dollar spent is the same for all goods consumed. c. total utility becomes zero. d. a reallocation of income would increase the consumer's total utility.Question 6 A consumer spends all of her income on two goods, coffee and doughnuts. She buys coffee at 25 cents per unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchased at 75 cents a unit with a total utility of 200 and a marginal utility of 24. To increase her total utility, the consumer should: Buy more coffee and less doughnuts Buy more of both goods Do nothing. She is currently maximizing utility with her limited budget. Buy less of both goods Buy more doughnuts and less coffee.