Question

- Assuming consumers have transitive preferences, a consumer's indifference curves can never cross.

a) True

b) False

- Firms that automatically enroll their employees in retirement plans, giving them the option to opt-out instead of to opt-in, is an example of a form of behavioral economics known as

a) nudges

b) anchoring

c) network externality

d) the endowment effect

- The demand curve for a luxury good is upward sloping.

a) True

b) False

- The law of diminishing marginal utility states that

a) the extra satisfaction from consuming a good decreases as more of a good is consumed, other things constant.

b) when the extra satisfaction from consuming a good becomes negative, total utility starts falling, other things constant.

c) eventually total utility falls as more of a good is consumed, other things constant.

d) the extra satisfaction from consuming a good increases slowly as more of a good is consumed, other things constant.

Answer 1

Question:- 1) Assuming consumers have transitive preferences, a consumer's indifference curves can never cross

Answer:- a.) true.

Explanation:- Consumer preference means consumer choice which gives them satisfaction , happiness and utility.
If preference is internally consistent then it is transitive.
For example- 1st is preferred to 2nd, 2nd is preferred to 3rd, 3rd is preferred to 1st.
So, the implication of transitive preference is that indifference curves can't cross each other, therefore true option is the correct option.

Question 2:-) Firms that automatically enroll their employees in retirement plans, giving them the option to opt-out instead of to opt-in, is an example of a form of behavioral economics known as:-

Answer:- a.) Nudges.

Queston 3:- The demand curve for a luxury good is upward sloping.

Answer:- a.) True.

Explanation:- The law of demand curve for luxury good is upword sloping an do not downword . this is because the luxury goods are status symbol. Whose price increases because companies khnow well they are status syombal and therefore increase in it's price will increase demand. so demand curve for luxury good is upword sloping.

Question 4:- The law of diminishing marginal utility states that:-

Answer :- a.)  the extra satisfaction from consuming a good decreases as more of a good is consumed, other things constant. is the correct answer.

Explanation:- The law of diminishing marginal utility states that ,other things remains constant , as consumption is increases the marginal utility derived from each additional unit decreses .marginal utility is the increamental utility that derive from consuming one additional unit of the goods.

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