Multiple Questions Answers

1. According to the law of demand there is ________ relationship between price and quantity demanded. (Points : 1) 
a positive
a negative
either a positive or negative
a constantly changing 

2. When the decrease in the price of one good causes the demand for another good to decrease, the goods are (Points : 1) 
normal.
inferior.
substitutes.
complements. 

3. If a household's income falls by 10%, its budget constraint will (Points : 1) 
shift out parallel to the old one.
pivot at the Y-intercept.
shift in parallel to the old one.
be unaffected. 

4. We can state the utility-maximizing rule in words in the following way: A person maximizes utility when she equalizes the ________ across products. (Points : 1) 
total utility
total utility per dollar spent
marginal utility
marginal utility per dollar spent