The predictions of marginal utility theory
A) contradict the idea that the demand curve slopes downward.
B) support the idea that the demand curve slopes downward.
C) support the idea that the supply curve slopes upward.
D) contradict the idea that the supply curve slopes upward.
B
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Joe consumes pizza and movies. Pizza and movies are substitutes. According to marginal utility theory, if the price of a pizza rises then
A) the demand curve for pizza shifts leftward. B) the demand curve for pizza shifts leftward and the demand curve for movies shifts rightward. C) there is an upward movement along the demand curve for pizza. D) there is an upward movement along the demand curve for pizza and the demand curve for movies shifts rightward.
If a person is risk averse, then as wealth increases, total utility of wealth
a. increases at an increasing rate. b. increases at a decreasing rate. c. decreases at an increasing rate. d. decreases at a decreasing rate.