7 Quiz - 1. What do the income effect, the substitution...

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What do the income effect, the substitution effect, and diminishing marginal utility have in common? A) All are required to explain the utility-maximizing position of a consumer. B) They are all empirically measurable. C) They all help explain the upsloping supply curve. D) They all help explain the downsloping demand curve. 2. Assume MU c and MU d represent the marginal utility that a consumer gets from products C and D, the respective prices of which are P c and P d . The consumer will increase his total utility from a specific money outlay by spending more on C and less on D if initially: A) B) C) D) 3. Some modern theories of consumer behavior have: A) emphasized that consumption is basically an instantaneous act. B) contended that in the MU x / P x = MU y / P y equation MU is understated for time-intensive goods. C) introduced the opportunity cost of time as a component of product price. D) argued that inflationary expectations negate the theory of consumer behavior.
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7 Quiz - 1. What do the income effect, the substitution...

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