1. Indifference curves are convex to the origin if:A. a persons marginal rate of substitution declines a he or she consumes more of a good.B. a persons marginal rate of substitution increases as he or she consumes more of a good.C. the law of diminishing marginal utility holds.D. A and C

2. The budget constraint cuts the horizontal axis at 12 units of good X and it cuts the vertical axis at 20 units of good Y. If the price of good X is $20 and the price of good Y is $12, then what does income equal?a. $200b. $240c. $520d.$280

3. If the price of good X falls and the demand for good X is inelastic, then the percentage _______ in quantity demanded is _______ the percentage fall in price, and total revenue _________.a. fall; greater than; risesb. fall; less than; risesc. fall; equal to; remains constantd. rise; less than; fallse. fall; greater than, falls

4. The ________ one's income, the _______ one's budget constraint. Further, if there are two goods, X and Y, and the absolute price of good Y falls. It follows that:a. smaller; further away from the origin; a person can buy more of good Y.b. larger; closer to the origin; there is no change in the consumption rate of good Y.c. larger; further away from the origin; a person can buy more of good Y.d. smaller; steeper the slope of; there is no change in the consumption rate of good Y.

5. The law of diminishing marginal utility can be stated as follows:a. as the amount of a good consumed increases, the sum of satisfaction received tends to decrease.b. as the amount of a good consumed increases, the additional satisfaction gained from consuming additional units tends to decrease.c. as the amount of a good consumed increases, the sum of satisfaction received tends to increase but at a diminishing rate.d. B and C.5.