True or false: consumer choices

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   Consumers maximise utility within a budget.

2. Statement is true

   No

   Statement

   Marginal utility rises with each unit added.

3. Statement is true

   Yes

   Statement

   Marginal utility per dollar divides by price.

4. Statement is true

   No

   Statement

   The income effect assumes actual income changed.

5. Statement is true

   Yes

   Statement

   Consumer equilibrium is the utility-maximizing choice.

Instructions

Tap True or False for each statement.

Explanation