TRUE OR FALSE (10 points each): 1. Higher indifference curves yield higher utility. 2. Left shoes and rights shoes are perfect complements, thus, their indifference curve is a downward sloping straight line. 3. Indifference curves are downward sloping since preferences are transitive. 4. The optimal point of consumption is the bundle of goods that will give the consumer the highest level of savings.Use this figure for #5, #6 and #7. C F X 5. Bundle F is not an optimal bundle for consumption because the utility is too high. 6. The utility derived from consuming Bundle B is exactly equal to the utility derived from Bundle A. 7. A price increase in good x will cause optimal point of consumption to change from Bundle C to Bundle B.Use this for #8 and #9. y C y3 B X1 X2 X3 X Suppose that the initial optimal point of consumption is Bundle A, and the new optimal point of consumption is Bundle C. B. The change in consumption of goods x and y from Bundle A to Bundle C is brought about by a decrease in price of good y. 9. The substitution effect is shown by the movement from Bundle A to Bundle B due to a change in purchasing power of the consumer. 10. The marginal effect shows the change in consumption brought about by a change in the relative price