The MU/P of a good will decrease when there is a(n)
a. fall in the price of the good
b. increase in its marginal utility
c. increase in the price of a good
d. increase in consumer surplus
e. decrease in income
C
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A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon, it sold 33% less milk. Since everything else remained the same, we would say the
a. demand for milk is perfectly elastic b. demand for milk is elastic c. demand for milk is perfectly inelastic d. demand for milk is unitary elastic e. law of supply does not apply in this situation
If a supplier faces a perfectly horizontal demand curve and sets his price slightly higher than the demand curve itself, he can expect
a. no change in his total revenues b. everyone to begin buying his product c. a complete loss of revenues d. a new demand curve e. a relative increase in income
An indifference curve shows
a) different combinations of income and prices at which an individual can afford equal quantities of two goods b) different combination of goods that all cost the same c) different quantities of current and future consumption that are consistent with the intertemporal budget constraint d) different combinations of goods that yield the same level of satisfaction e) different levels of satisfaction that can be obtained from a given budget constraint
Assume that the quantity of CDs is measured on the horizontal axis, while the quantity of movie tickets is measured on the vertical axis. If available income decreases, then
A. the vertical intercept of the budget line decreases, while the horizontal intercept remains unchanged. B. the horizontal intercept of the budget line decreases, while the vertical intercept remains unchanged. C. the budget line will shift inward. D. the budget line will shift outward.