A utility-maximizing consumer equalizes marginal utilities per dollar spent across all
22. The law of diminishing marginal utility states that total utility increases by smaller and
smaller increments as more of a good is consumed.
23. We expect the marginal utility curve to be downward sloping.
24. Consuming one more of a good increases its marginal-utility-to-price ratio, and
consuming one less of the other good lowers its marginal-utility-to-price ratio.
25. Consumer surplus is the difference between the minimum amount a person would be
willing to pay for a good and the amount the person actually paid.
26. Economists must actually measure the utilities of goods to determine demand.
27. There is a paradox that water has a high marginal utility, yet we value it little, while
diamonds have a low marginal utility, while we value them highly.
28. A consumer purchases just two goods: X and Y. If the price of one good X rises, the
consumer buys less of good X and the same amount of good Y.
29. For a given price, a decrease in demand will decrease consumer surplus.
30. Indifference curves are typically shaped like total utility curves.
31. The water and diamond paradox can be explained with the law of diminishing marginal
utility and the comparative availability of water and diamonds.
32. Moving from one curve to another in an indifference map always increases utility.
33. The budget constraint 12,000 = 2X + 4Y has a slope equal to –2 where Y is on the
34. A change in a consumer’s feelings about the desirability of a good will result in an altered
slope of the budget constraint.
35. As population of a region increases, the consumer’s demand curve for a product will
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