Alora buys only two brands of golf balls: "Nickless" and "Olin 1." The more of any one she buys, the lower the marginal utility of that ball. In spending all her income, her marginal utility of a "Nickless" is 5 and her marginal utility of an "Olin 1" is 10. The price of a "Nickless" ball is $2 and the price of an "Olin 1" is $3. Given this information, which of the statements is true?

• Alora would be willing to give up two "Olin 1" balls for one "Nickless" ball.
• Alora could increase her satisfaction by trading "Nickless" for "Olin 1" balls.
• In equilibrium, Alora must give up three "Olin 1" balls for two "Nickless" balls

You are a lawyer representing a client who lost their $1 million home in a house fire. They are suing the home's architect as design flaws were a major cause of the fire. How large would the damages awarded by the court to your client need to be in order for them to be equally happy as they were before the fire?

• exactly $1 million
• some amount greater than $1 million
• some amount less than $1 million

Gabriel likes to spend his budget on horseback riding lessons and baseball lessons. Suppose the price of baseball lessons decreases, but his income and the price of horseback riding lessons remains unchanged. This would allow us to derive:

• Gabriel's marginal benefit for horseback riding lessons and baseball lessons.
• Gabriel's demand curve for horseback riding lessons.
• Gabriel's budget line.
• Gabriel's demand for baseball lessons.

As a student Shayla enjoys consuming alphabet soup which is considered an inferior good. After Shayla graduates from college she acquires a job working as a data analyst and her income increases dramatically. What will most likely happen to Shayla's consumption of alphabet soup?

• Shayla would discontinue consuming the soup and switch to peanut butter.
• Shayla would discontinue consuming the soup and start eating steaks.
• Shayla would continue consuming alphabet soup.

Which of the following statements istrue?

• A consumer has only one indifference curve.
• The slope of the indifference curve is called the marginal rate of substitution.
• Diminishing marginal rate of substitution means that the marginal rate of substitution increases as more of the good is consumed.