As a consumer gives up some of Good A to get more of Good B, his or her marginal

Question

As a consumer gives up some of Good A to get more of Good B, his or her marginal rate of substitution of Good A for Good B: 1. becomes infinite. 2. goes from negative to positive. 3. increases. 4. decreases. Jane consumes only bananas and passion fruit. It is not possible for Jane's indifference curves to cross one another at any point. TrueFalse A Giffin good is an inferior good for which the income effect dominates the substitution effect. TrueFalse When Laurie asks Matt if he wants a large popcorn and a small soda, or a small popcorn and a large soda, and Matt says, "Oh, I'm indifferent," this means that Matt 1. doesn't want popcorn and soda. 2. thanks both bundles give him the same utility. 3. thinks both bundles give him no utility. 4. thinks the utility he gained from popcorn and soda exactly equals their cost.

Explanation / Answer

Part 1:
marginal rate of substitution of Good A for Good B:
= 3. increases

(example: For example, if the MRSxy = 2, the consumer will give up 2 units of Y to obtain 1 additional unit of X.)

Part 2:
TRUE
beacuse they are independent.

Part3:
FALSE
because actually the oppositr will happen.

Part 4:
2. thanks both bundles give him the same utility.

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