Managerial Economics 12th Edition by Mark Hirschey

Exercise 1

Utility Theory. Determine whether each of the following statements is true or false. Explain why.
A. According to the theory of consumer behavior, more is always better.
B. Consumers must understand how much one product is preferred over another in order to rank order consumption alternatives.
C. A market basket is a descriptive statement that relates satisfaction or well-being to the consumption of goods and services.
D. The nonsatiation principle abstracts from time and place considerations.
E. Marginal utility measures the consumer's overall level of satisfaction derived from consumption activities.