. (True/False) If you received negative marginal utility from your total utility
ID: 1105631 • Letter: #
Question
. (True/False) If you received negative marginal utility from your total utility from 4 slices of pizza must be less than your total utility from 3 slices of pizza. 2. (True/False) If the demand curve is a straight line and is downward sloping, then as the price Falls, demand becomes more elastic. -3, which of the following demonstrates the endowment effect? a. Whelan inherits a cottage in Cape Cod from his grandfather and is unwilling to sell it for sentimental reasons. b. George Clooney commands a premium in the movie industry because he is endowed with dashing looks. c. If you received a good as a gift, you are less likely to attach a monetary value to the good. d. Isabella was not willing to part with her "George Clooney" poster although she was offered $100 for it, a sum greater than what it costs to purchase another such poster -4. Total utility a. cannot decrease as a person consumes more and more of a good. b. has a constant rate of increase as a person consumes more and more of a good. c. is equal to the sum of the marginal utilities of all units consumed. d. is negative when marginal utility is declining. 5. All of the following products are likely to have significant network externalities except a. cat food. b. cell phones. c. popular board games. d. Twitter 6. When the price of audio books, a normal good, falls, causing your purchasing power to rise you huy more of them due toExplanation / Answer
1) True
Marginal utility of the change in total utility from consuming from one more unit of the good. When marginal utility is negative total utility of 4th slice is less than total utility of 3rd slice.
2) True
At lower price demand curve is inelastic and as price increases demand changes more. This at higher price demand curve is more elastic.
3) d is correct.
Endowment effect states that people give more value to thing they already own than things they don't own yet. Isabella is not willing to sell at higher price because she has more value to it.
4) c is correct
Marginal utility is the change in total utility from consuming one more unit. Thus total utility is the sum of marginal utilities.
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