Help 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 necessity

Help 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 necessity

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 1.3P

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Question

Help 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 necessity

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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