Marginal Utility Analysis Predicts a Downward- Sloping Demand Curve for Good

question 11

Multiple Choice

Marginal utility analysis predicts a downward- sloping demand curve for good X because

• A) utility- maximizing consumers equate marginal utility received for each product consumed.
• B) all demand curves are downward sloping, regardless of the behaviour of consumers.
• C) as PX falls, the ratio MUX/PX becomes smaller, causing the consumer to purchase more of good X.
• D) as PX falls, the consumer increases purchases of X such that MUX/PX is equal to MU/P for all other products.
• E) as PX rises, the consumer increases purchases of X such that MUX/PX is equal to MU/P for all other products.