If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of Multiple Choice increases from 2 to 4. stays the same at 2, but the consumer has $1 remaining. decreases from 4 to 3.

A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 10 and the marginal utility of Y is 8. The unit price of X is $5 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should

Amy consumes x and y and her preferences can be represented by the following utility function U(x,y) = 4x + y. 1. Are Amy's preferences transitive? 2. Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. 6- 3. Can you use (2) to answer whether Amy's preferences are strictly monotonic? 4. What is MRS.y ? Is MRSx.y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? 5. On a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve. Also indicate on your graph whether the indifference curve will intersect either or both axes. Label the curve U1. 6. Are Amy's preferences convex? Are they strictly convex? Explain

Given Utility function U=20Q-2Q^2, what quantity of good gives highest utility for the consumer? What will happened if the consumer obtains more quantity than the one you computed?