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All points inside a consume

All points inside a consume

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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True or False: 1. All points inside a consumer's budget line are unaffordable. 2. The principal of diminishing marginal utility means that as consumption of a good increases, total utility increases but at a decreasing rate. 3. A household is maximizing utility if the marginal utility is equal for all goods and all its income is spent. 4. If the marginal utilities from consuming two goods are not equal, the consumer cannot be in equilibrium. 5. If the marginal utility per dollar spent on good X exceeds the marginal utility per dollar spent on good Y, total utility will increase by increasing the consumption of X and decreasing consumption of Y. When the price of good X rises, the marginal utility from the consumption of X decreases. 6. 7. When income decreases, the marginal utility derived from a good will always increase. 8. A demand curve describes the quantity demanded at each price when marginal utility is maximized.
Transcribed Image Text:True or False: 1. All points inside a consumer's budget line are unaffordable. 2. The principal of diminishing marginal utility means that as consumption of a good increases, total utility increases but at a decreasing rate. 3. A household is maximizing utility if the marginal utility is equal for all goods and all its income is spent. 4. If the marginal utilities from consuming two goods are not equal, the consumer cannot be in equilibrium. 5. If the marginal utility per dollar spent on good X exceeds the marginal utility per dollar spent on good Y, total utility will increase by increasing the consumption of X and decreasing consumption of Y. When the price of good X rises, the marginal utility from the consumption of X decreases. 6. 7. When income decreases, the marginal utility derived from a good will always increase. 8. A demand curve describes the quantity demanded at each price when marginal utility is maximized.
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