13.If consumers have strong brand loyalties towards Levi jeans compared to other jeans, which of the following statements about cross elasticity of demand for Levi jeans is likely?

• A.It will be small and negative.
• B.It will be small and positive.
• C.It will be large and positive.
• D.It will be large and negative.

14.If Zurika's marginal utility for a loaf of bread is 10 and for 500g of cheese is 30, her

• A.total utility would be maximised if the price of 500g cheese is one-third the price of a loaf of bread.
• B.total utility would be maximised if the price of 550g cheese is triple the price of a loaf of bread.
• C.total utility could be increased by buying more cheese and less bread.
• D.total utility could be increased by buying more bread and less cheese.

15.The relationship between total utility and marginal utility is as follows

• A.As total utility increases at a decreasing rate, marginal utility decreases.
• B.When total utility is at a maximum point, marginal utility is at its maximum.
• C.As total utility starts to decline, marginal utility becomes positive.
• D.As total utility increases at a decreasing rate, marginal utility increases.

Question 16 of 20

Marginal utility is

• A.the extra utility that a consumer derives from consuming an additional unit of a good.
• B.when the consumer's total utility increases at a decreasing rate.
• C.the point where total utility eventually declines.
• D.the sum of all the total utilities.

17.A consumer is maximising his/her utility when

• A.the marginal utility for all goods purchased is equal.
• B.marginal utility is negative on all goods and services.
• C.the marginal utilities per rand are the same on all goods in his/her budget.
• D.the use value of a good minus the exchange value of a good is negative.

Question 18 of 20

A utility-maximising consumer will choose to purchase another unit of a good if

• A.the marginal utility of the good is falling.
• B.the good has the highest weighted marginal utility.
• C.the opportunity cost of consuming the good is constant.
• D.the good has the lowest weighted marginal utility.

Question 19 of 20

A consumer is in equilibrium when _____

• A.his or her weighted marginal utility is at a maximum.
• B.the marginal utilities per rand spent are equal for all goods purchased.
• C.his or her average utility is at a maximum.
• D.his or her marginal utility is at a maximum.