Marginal utility analysis predicts a downward sloping

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Essentials of Economics
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Chapter 15 / Exercise 6
Essentials of Economics
Mankiw
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42)Marginal utility analysis predicts a downward - sloping demand curve for good X because 42) A) as P X rises, the consumer increases purchases of X such that MU X /P X is equal to MU/P for all other products. B) as P X falls, the consumer increases purchases of X such that MU X /P X is equal to MU/P for all other products. C) all demand curves are downward sloping, regardless of the behaviour of consumers. D) utility - maximizing consumers equate marginal utility received for each product consumed. E) as P X falls, the ratio MU X /P X becomes smaller, causing the consumer to purchase more of good X. Answer:B
Diff: 2 Topic: 6.1b. utility maximization Skill: Recall 43) If John consumes only two goods, A and B, and he is maximizing his utility subject to his budget constraint, 43)
Diff: 2 Topic: 6.1b. utility maximization Skill: Applied 12
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Essentials of Economics
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Chapter 15 / Exercise 6
Essentials of Economics
Mankiw
Expert Verified
44)The substitution effect is the change in quantity demanded that occurs 44)
Diff: 2 Topic: 6.2. income and substitution effects Skill: Recall 45)The income effect refers to the change in quantity demanded that occurs as a result of a change in 45)
Diff: 2 Topic: 6.2. income and substitution effects Skill: Recall 46)If the price of a normal good changes, the income effect of the price change will 46) A) always be larger than the substitution effect. B) oppose the substitution effect. C) produce a positively sloped demand curve. D) always be to increase quantity demanded. E) reinforce the substitution effect. Answer:E
Diff: 2 Topic: 6.2. income and substitution effects Skill: Recall

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