Multiple choice

1. The "law of demand" implies that (Points : 1) 

as prices fall, demand increases.

as prices rise, demand increases.

as prices fall, quantity demanded increases.

as prices rise, quantity demanded increases. 

2. The law of diminishing marginal utility refers to (Points : 1) 

a consumer's decrease in total satisfaction as she consumes more units of a good.

a consumer's decrease in additional satisfaction as she consumes more and more units of a good.

the idea that total utility is negative.

the idea that marginal utility is negative. 

3. In college you practically existed on instant noodles, but now you earn $95,000 a year. You never want to see instant noodles again. We can safely conclude that you consider instant noodles to be a(n) (Points : 1) 

normal good.

complementary good.

luxury.

inferior good. 

4. A car's real cost is its opportunity cost. Opportunity cost is determined by (Points : 1) 

the price of the car.

relative prices.

wealth.

the prices of the goods that are compliments to a car.