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[A] quantity demanded will increase by 30 percent.
[B] total revenue will decrease.
[C] quantity demanded will increase by 3 percent.
[D] total revenue will remain unchanged.
[E] demand will increase by 30 percent.
2. When the price increases from $4 to $6 and the quantity demanded decreases by 2 units, the price elasticity of demand is
[A] -25.
[B] -1.5.
[C] -5.
[D] -2.5.
[E] Cannot be determined from the information given.
3. Cole is about to purchase 4 units of good A and 6 units of good B. The price of both A and B is $2. Cole has only $20 to spend. Assume that the marginal utility of the fourth unit of A is 12 and the marginal utility of the sixth unit of B is 8. If Cole wants to maximize utility
[A] he should buy more of A and less of B.
[B] from the information given, it is impossible to determine whether or not Cole is maximizing utility.
[C] he should buy less of A and more of B.
[D] he should not buy anything.
[E] he should buy A and B in the quantities indicated.
