AY22_Sem1_B220_L02

Which of the following will result in an inward shift of budget line for product A and B.

• Price of A decreases by 50%

• Price of B decreases by 50%

• Price of both products decreases by 50%

• Budget decreases by 50%

Figure 1 shows the indifference curves of a consumer for food and drinks. Which point of consumption bundle will give the highest utility?

• Point A

• Point B

• Point C

• Point D

Fill in the blanks in the following sentence.

_______ _______ is the satisfaction gained from consuming an additional quantity of that item.

In the table shown, what is the marginal utility for the third bottle of water consumed?

• 5

• 10

• 3

• 8

If total utility increases at a decreasing rate as a consumer consumes more coffee, then marginal utility must:

• be negative

• be decreasing

• remain constant

• be increasing