SOLVED

31) The paradox of value asks why A) bad things happen to good people. B) the price of water is low and the price of a diamond is high, but water is essential to life while diamonds are not. C) the good die young. D) total utility is greater than marginal utility. E) the standard of living is higher in North America than in South America. 32) Marginal utility theory predicts that a rise in the price of a banana results in A) the demand curve for bananas shifting rightward. B) the demand curve for bananas shifting leftward. C) a movement upward along the demand curve for bananas. D) a movement downward along the demand curve for bananas. E) the demand curve for bananas shifting rightward and the supply curve for bananas shifting rightward. 33) Which of the following statements is true? A) Marginal utility theory predicts that an increase in a consumer’s income increases consumption of all goods. B) It is possible to derive the law of demand — that a higher price decreases the quantity demanded — using marginal utility theory. C) Marginal utility theory makes no prediction about a consumer’s responses to hikes in the prices of the goods and services he or she consumes. D) Marginal utility theory predicts that all goods are normal goods and that all goods are substitutes for each other. E) It is possible to derive the law of demand — that a higher price decreases demand — using marginal utility theory. 34) Bianca consumes pizza. Marginal utility theory predicts that when the price of pizza increases, A) Bianca’s total utility from pizza will increase. B) Bianca’s marginal utility from pizza will not change. C) Bianca’s demand curve for pizza will shift leftward. D) Bianca will buy less pizza. E) Bianca will buy more pizza. 35) Lucy buys only magazines and CDs. Both are normal goods. Lucy’s income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that A) Lucy buys more magazines and more CDs. B) Lucy buys fewer magazines and fewer CDs. C) Lucy’s demand curve for magazines shifts leftward. D) Lucy’s demand curve for CDs shifts leftward. E) B, C, and D are correct.  Â