Consumer Preferences

question 36

Short Answer

Consumer Preferences. Indicate whether each of the following statements is true or false. Explain why.
A. According to the more is better principle, all goods and services are desirable in the sense of being able to satisfy consumer wants.
B. When preferences are complete, consumers know how much a given good or service is preferred compared to another good or service.
C. The nonsatiation principle dictates that each incremental unit of consumption causes marginal utility to rise.
D. If two services provide the same amount of satisfaction or utility, the consumer is said to display indifference between the two.
E. The consumer's understanding of cardinal utility makes possible a rank ordering of preferred goods and services.

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Definitions:

Paycheck

A check issued to an employee in payment for their work.

Apostrophes

Punctuation marks used to indicate either possession (e.g., Harry’s book) or the omission of letters or numbers (e.g., can’t for cannot).

Bicycle

A bicycle is a human-powered, pedal-driven vehicle with two wheels attached to a frame, one behind the other.

Fair Die

A die that has an equal probability of landing on any of its faces when thrown.