Question

​For any given price, the more elastic is the demand for a good, the greater will be the consumer surplus.

Select one:

True

False

A free good will be consumed up to the point at which its marginal utility is positive.

Select one:

True

False

As price falls along the demand curve for pretzels, _____.

Select one:

a.

​consumer surplus remains unchanged

b.

​consumer surplus decreases

c.

​total utility decreases

d.

​consumer expenditure changes

e.

​marginal utility increases

​Arnold is a utility-maximizing consumer. If he thinks his last dollar spent on playing golf yields less satisfaction than the last dollar spent on movies, he should:

Select one:

a.

​play more golf so that the total satisfaction derived from golf increases.

b.

​spend less on movies so that the marginal satisfaction of a movie increases.

c.

​play less golf and spend more on movies.

d.

​not play golf at all.

e.

​play more golf because it costs less.

​Consumer tastes and preferences:

Select one:

a.

​are determined solely by advertising.

b.

​are relatively stable over time.

c.

​do not vary from one consumer to another.

d.

​are irrelevant to utility analysis.

e.

​can be measured in terms of units of utility.

Answer 1

Answer
1 False
the equilibrium ( or controlled price ) dictates the amount of consumer's surplus

2.False
A free good will be consumed till marginal utility is zero

3.Consumer Expenditure changes
as price falls , the price paid by consumers decreases.

4.​play less golf and spend more on movies.
Movies give him more utility at his current leve of consumption, thus he should go wact movies instead of playing golf.

5.are irrelevant to utility analysis
Utility analysis simply meaures the utility derived and cmpares the values with other goods and services.

(Please consider giving an upvote if you find it useful)