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.
a. True
b. False
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QUESTION 2A monopolist maximizes total revenue.
a. True
b. False
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QUESTION 3Consumer equilibrium requires that the marginal utility per dollar spent be the same for all goods.
a. True
b. False
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QUESTION 4In order for a monopolist to earn an economic profit in short-run equilibrium, marginal revenue must be equal to zero.
a. True
b. False
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QUESTION 5Marginal utility tends to fall as a person increases his or her consumption.
a. True
b. False
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QUESTION 6A natural monopoly maximizes profits at the point at which price equals minimum average total cost.
a. True
b. False
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QUESTION 7The law of diminishing marginal utility states that total utility increases by smaller and smaller increments as more of a good is consumed.
a. True
b. False
Indicate whether the statement is true or false
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