1. If a consumer's income increases and if all goods are normal goods, explain how the quantity bought of each good changes.

2. Describe the following concepts: Utility, Total Utility, Marginal Utility and Paradox of value.

3. Jerry has $12 a week to spend on yogurt and magazines. The price of yogurt is $2, and the price of a magazine is $4:

a) List the combinations of yogurt and magazines that Jerry can afford. Draw a graph of Jerry's budget line with the quantity of magazines plotted on the x-axis. b) Describe how Jerry's consumption possibilities change if, other things remaining the same, (i) the price of a magazine falls and (ii) Jerry's income increases.

4. Draw figures that show your indifference curves for the following pairs of goods:

Right gloves and left gloves Coca-Cola and Pepsi Tylenol and acetaminophen (the generic form of Tylenol) Desktop computers and laptop computers Strawberries and ice cream

For each pair, are the goods perfect substitutes, perfect complements, substitutes, complements, or unrelated?