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

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