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Unformatted text preview: Ch. 19 True/False: True Answers: 1. Utility is the benefit or satisfaction a person receives from consuming a good or service 2. Utility and usefulness are NOT synonymous 3. Marginal utility is the change in total utility from consuming one more unit of a product 4. Law of diminishing marginal utility indicates that gains in satisfaction become smaller as successive units of a specific product are consumed 5. If total utility is increasing, then marginal utility is positive and may be either increasing or decreasing 6. The theory of consumer behavior assumes that consumers act rationally to get the most for their money 7. All consumers are subject to budget constraints 8. To find a consumer’s demand for a product, the price of the product is varied while tastes, income, and the prices of other products remain unchanged 9. In most cases, a change in incomes will cause a change in the portfolio of goods and...
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