Answer the following statement true (T) or false (F)

1) The limited money income of consumers results in a so-called budget constraint.
2) A rational consumer will cease purchasing a product at that quantity where marginal utility
begins to diminish.
3) When a consumer is maximizing total utility, he or she cannot increase total utility by
reallocating expenditures among different products.
4) When the price of a product falls, the income effect induces the consumer to purchase more of
it while the substitution effect prompts her to buy less.

1) T
2) F
3) T
4) F