Lahore School of Economics


the other commodity generates less utility per dollar spent on the good



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Quiz 2- Version1 (1)
the other commodity generates less utility per dollar spent on the good.

  • the two commodities must be perfect substitutes.

    Monica consumes only goods A and B. Suppose that her marginal utility from consuming good A is equal to 1/Qa, and her marginal utility from consuming good B is 1/Qb. If the price of A is $0.50, the price of B is $4.00, and the Monica’s income is $120.00, how much of good A will she purchase?



    1. 0

    2. 12

    3. 24

    4. 48

    5. 120

    An individual demand curve can be derived from the curve.



    1. price-consumption

    2. price-income

    3. income-substitution

    4. income-consumption

    5. Engel curve

    When the income-consumption curve has a positive slope throughout its entire length, we can conclude that

    1. both goods are inferior.


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