F 1. Advertising is used to make the demand curve for a product shift right and become more elastic. F 2. F A horizontal demand curve has an elasticity of zero. 3. All price elasticities of demand along downward-sloping demand curves have a negative value when they are computed, but are often represented as absolute values. F 4. When the price of a good decreases, the demand curve shifts to the right. F 5. A negative cross price elasticity implies that two goods are substitutes. 6 . According to the law of diminishing marginal utility, the additions to our total utility decrease in size as we consume more of a product. F 7. Total revenue for a business will rise if demand for the good is elastic and the business decreases the price of the good. T F 8. If price elasticity of demand is under 1 then a reduction in price for a business will not affect total revenue. When the price of a good is expected to rise next month, then in the current period there should be: bord to sgole (a) A downward movement along the demand curve.w 291289M () (b) An upward movement along the demand curve. (stol medw asianoM (b) c) A leftward shift in the demand curve. boo (d) A rightward shift in the demand curve. of agassroni x boog to going II .81. eboog seeri sbulonoo nso sw .8 of or mont 29269709b a 10. Advertising is intended to efnsmolgmod (s) Shift the demand curve and make demand more elastic. boog meldeV (d) (b) Shift the demand curve but not change the slope. c) Change the slope of the demand curve to be more inelastic and cause a shift. (d) Cause a movement along the demand toward a greater quantity demanded. b 11 . Assume shoes cost $120 and phones cost $800. If shoes have a marginal utility of 20 utils and phones have a marginal utility of 160 utils then a consumer a (a) Should purchase more phones. a (B) 88.0 (d) (b) Should purchase more shoes. (c) Is purchasing the ideal combination of goods. (d) Is experiencing diminishing marginal utility. b 12. As more of a good is consumed, total utility always: (a) Rises. (b) Increases as long as marginal utility is positive. (c) Increases as long as marginal utility is falling. (d) None of the above. a 13. Demand for cars would remain unchanged with: (a) A change in consumer income. VT (B) A change in the price of a substitute. ~ C (c) A change in the unemployment rate. * () A change in the price of cars. TV