Consumer Theory Quiz PDF
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Questions and Answers

In consumer theory, what does the law of demand state?

  • As the price of a good decreases, the quantity demanded decreases, all else being equal.
  • As the price of a good increases, the quantity demanded increases, all else being equal.
  • As the price of a good increases, the quantity demanded decreases, all else being equal. (correct)
  • As the price of a good decreases, the quantity demanded increases, all else being equal.

    • What is the primary focus of consumer theory?

  • The study of how consumers allocate their income to maximize utility. (correct)
  • The study of how government policies impact consumer behavior.
  • The study of how consumer preferences are formed.
  • The study of how producers allocate their resources to maximize profit.

    • What does the concept of 'marginal utility' refer to in consumer theory?

  • The satisfaction gained from consuming the first unit of a good or service.
  • The total satisfaction gained from consuming a good or service.
  • The additional satisfaction gained from consuming one more unit of a good or service. (correct)
  • The average satisfaction gained from consuming a good or service.

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