Question 1

Ron starts out in consumer equilibrium,consuming two goods,X and Y.Ron's income rises.At this point,we can definitely conclude that

Accepted Answer

A) MUX/PX > MUY/PY,and then Ron increases his consumption of X. 
B) MUX/PX > MUY/PY,and then Ron decreases his consumption of X. 
C) MUX/PX Y/PY,and then Ron increases his consumption of X. 
D) MUX/PX Y/PY,and then Ron decreases his consumption of X. 
E) none of the above. 
A) MUX/PX > MUY/PY,and then Ron increases his consumption of X. 
B) MUX/PX > MUY/PY,and then Ron decreases his consumption of X. 
C) MUX/PX Y/PY,and then Ron increases his consumption of X. 
D) MUX/PX Y/PY,and then Ron decreases his consumption of X. 
E) none of the above.

Question 2

If the price of a good rises,then in the new consumer equilibrium all of the following are true except

Accepted Answer

A) the marginal utility from consuming the good will be higher than before the price rise. 
B) the quantity of the good consumed decreases. 
C) the quantity of substitutes consumed increases. 
D) the marginal utility from substitutes will be lower than before the price rise. 
E) the marginal utility from the good equals its new higher price. 
A) the marginal utility from consuming the good will be higher than before the price rise. 
B) the quantity of the good consumed decreases. 
C) the quantity of substitutes consumed increases. 
D) the marginal utility from substitutes will be lower than before the price rise. 
E) the marginal utility from the good equals its new higher price.

Question 3

Use the table below to answer the following questions.
Table 8.2.2  
-Refer to Table 8.2.2.What is the total utility if 3 bags of popcorn and 2 bottles of pop are consumed?

Accepted Answer

A) 150 
B) 310 
C) 490 
D) 660 
E) 100 
A) 150 
B) 310 
C) 490 
D) 660 
E) 100

Question 4

Consider Devon's total utility from snorkeling and windsurfing in Table 8.3.1.Suppose that Devon's total income rises from $35 to $55,ceteris paribus.Given that Devon changes his choice of windsurfing and snorkeling,what is his income elasticity for windsurfing?

Accepted Answer

A) zero 
B) 28.6 
C) 44.4 
D) 0.64 
E) 1.55 
A) zero 
B) 28.6 
C) 44.4 
D) 0.64 
E) 1.55

Question 5

Advise Sarah how to maximize her utility if MUA = 8,MUB = 20,PA = 4 and PB = 5.

Accepted Answer

A) Consume equal amounts of both goods. 
B) Consume more of good A and less of good B. 
C) Consume more of good B and less of good A. 
D) Lower the price of good B. 
E) Raise the price of good A. 
A) Consume equal amounts of both goods. 
B) Consume more of good A and less of good B. 
C) Consume more of good B and less of good A. 
D) Lower the price of good B. 
E) Raise the price of good A.

Question 6

In consumer equilibrium,a consumer equates the

Accepted Answer

A) total utility from each good. 
B) marginal utility from each good. 
C) total utility per dollar on each good. 
D) marginal utility per dollar on each good. 
E) total income spent on each good with total utility from each good. 
A) total utility from each good. 
B) marginal utility from each good. 
C) total utility per dollar on each good. 
D) marginal utility per dollar on each good. 
E) total income spent on each good with total utility from each good.

Question 7

Jim has made his best affordable choice of muffins and coffee.He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each.Now the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup.Jim can still afford to buy 10 muffins and 20 cups of coffee.Jim will buy ________ muffins and ________ coffee.

Accepted Answer

A) more;fewer 
B) fewer more 
C) more;more 
D) fewer;fewer 
E) the same quantity of;the same quantity of 
A) more;fewer 
B) fewer more 
C) more;more 
D) fewer;fewer 
E) the same quantity of;the same quantity of

Question 8

Consider Devon's total utility from snorkeling and windsurfing in Table 8.3.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,how long does Devon choose to windsurf and to snorkel?

Accepted Answer

A) 1 hour of windsurfing and 3 hours of snorkeling 
B) 2 hour of windsurfing and 7 hours of snorkeling 
C) 3 hours of windsurfing and 5 hours of snorkeling 
D) 4 hours of windsurfing and 3 hours of snorkeling 
E) 5 hours of windsurfing and 1 hour of snorkeling 
A) 1 hour of windsurfing and 3 hours of snorkeling 
B) 2 hour of windsurfing and 7 hours of snorkeling 
C) 3 hours of windsurfing and 5 hours of snorkeling 
D) 4 hours of windsurfing and 3 hours of snorkeling 
E) 5 hours of windsurfing and 1 hour of snorkeling

Question 9

The budget line

Accepted Answer

A) shows the limits to a household's consumption choices. 
B) shows the household's total utility. 
C) is downward sloping because it illustrates decreasing marginal utility. 
D) shows how a household's consumption choices change as income changes. 
E) shifts outward as total utility increases. 
A) shows the limits to a household's consumption choices. 
B) shows the household's total utility. 
C) is downward sloping because it illustrates decreasing marginal utility. 
D) shows how a household's consumption choices change as income changes. 
E) shifts outward as total utility increases.

Question 10

As a consumer's income decreases,marginal utility theory predicts that

Accepted Answer

A) the price of normal goods falls. 
B) the demand for normal goods decreases. 
C) the demand for all goods decreases. 
D) the demand for normal goods increases. 
E) total utility increases. 
A) the price of normal goods falls. 
B) the demand for normal goods decreases. 
C) the demand for all goods decreases. 
D) the demand for normal goods increases. 
E) total utility increases.

Question 11

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility from

Accepted Answer

A) oranges decreases. 
B) apples decreases. 
C) pears decreases. 
D) oranges remains constant. 
E) oranges,apples,and pears all decrease. 
A) oranges decreases. 
B) apples decreases. 
C) pears decreases. 
D) oranges remains constant. 
E) oranges,apples,and pears all decrease.

Question 12

Marginal utility equals

Accepted Answer

A) total utility divided by price. 
B) total utility divided by the total number of units consumed. 
C) the slope of the total utility curve. 
D) the inverse of total utility. 
E) the area below the demand curve but above market price. 
A) total utility divided by price. 
B) total utility divided by the total number of units consumed. 
C) the slope of the total utility curve. 
D) the inverse of total utility. 
E) the area below the demand curve but above market price.

Question 13

Utility is similar to temperature because

Accepted Answer

A) both are positive. 
B) both are negative. 
C) both have units of measurement that are arbitrary. 
D) both are observable. 
E) both are measured on the same scale. 
A) both are positive. 
B) both are negative. 
C) both have units of measurement that are arbitrary. 
D) both are observable. 
E) both are measured on the same scale.

Question 14

Sam buys gasoline and coffee each week.To draw his budget line for gasoline and coffee,Sam needs to know

Accepted Answer

A) if his income is expected to rise in the future. 
B) if the price of gasoline is expected to rise in the future. 
C) if the price of coffee is expected to fall in the future. 
D) the goods that he considers to be substitutes for gasoline and for coffee. 
E) how much income he has to spend and the prices of one litre of gasoline and one cup of coffee. 
A) if his income is expected to rise in the future. 
B) if the price of gasoline is expected to rise in the future. 
C) if the price of coffee is expected to fall in the future. 
D) the goods that he considers to be substitutes for gasoline and for coffee. 
E) how much income he has to spend and the prices of one litre of gasoline and one cup of coffee.

Question 15

With a given income and prices of goods,Marcus is in consumer equilibrium when

Accepted Answer

A) he purchases the same amounts of all goods. 
B) his marginal utility from all goods is maximized. 
C) his marginal utility from all goods is equal. 
D) he maximizes total utility. 
E) his total utility per dollar is equal for all goods. 
A) he purchases the same amounts of all goods. 
B) his marginal utility from all goods is maximized. 
C) his marginal utility from all goods is equal. 
D) he maximizes total utility. 
E) his total utility per dollar is equal for all goods.

Question 16

John and Sally have identical preferences except Sally's utility units are exactly 10 times that of John's.Both have the same income and face the same prices.Choose the best response.

Accepted Answer

A) John consumes 10 times the amount that Sally consumes. 
B) John receives 1/10 the satisfaction that Sally receives. 
C) Both will consume the same amount of all goods. 
D) John and Sally will have equal total utility. 
E) John and Sally will have equal marginal utility. 
A) John consumes 10 times the amount that Sally consumes. 
B) John receives 1/10 the satisfaction that Sally receives. 
C) Both will consume the same amount of all goods. 
D) John and Sally will have equal total utility. 
E) John and Sally will have equal marginal utility.

Question 17

According to the principle of diminishing marginal utility,as consumption of a good increases,total utility

Accepted Answer

A) decreases and then eventually increases. 
B) decreases at an increasing rate. 
C) decreases at a decreasing rate. 
D) increases at an increasing rate. 
E) increases at a decreasing rate. 
A) decreases and then eventually increases. 
B) decreases at an increasing rate. 
C) decreases at a decreasing rate. 
D) increases at an increasing rate. 
E) increases at a decreasing rate.

Question 18

Marginal utility theory assumes that when Kelly decreases the number of hockey games that she attends each week from 3 to 2,her

Accepted Answer

A) total utility increases. 
B) income increases. 
C) marginal utility increases. 
D) total utility is maximized. 
E) marginal utility is maximized. 
A) total utility increases. 
B) income increases. 
C) marginal utility increases. 
D) total utility is maximized. 
E) marginal utility is maximized.

Question 19

The budget line shows the boundary between those combinations of goods and services that

Accepted Answer

A) have positive marginal utility and those that have negative marginal utility. 
B) are available and those that are unavailable. 
C) are desirable and those that are undesirable. 
D) are affordable and those that are unaffordable. 
E) are normal goods and those that are inferior goods. 
A) have positive marginal utility and those that have negative marginal utility. 
B) are available and those that are unavailable. 
C) are desirable and those that are undesirable. 
D) are affordable and those that are unaffordable. 
E) are normal goods and those that are inferior goods.

Question 20

Use the table below to answer the following questions.
Table 8.1.1  
-Refer to Table 8.1.1.The value of B is

Accepted Answer

A) 30. 
B) 47. 
C) 42. 
D) 18. 
E) 0. 
A) 30. 
B) 47. 
C) 42. 
D) 18. 
E) 0.

Ron starts out in consumer equilibrium,consuming two goods,X and Y.Ron's income rises.At this point,we can definitely conclude that

If the price of a good rises,then in the new consumer equilibrium all of the following are true except

Use the table below to answer the following questions. Table 8.2.2 -Refer to Table 8.2.2.What is the total utility if 3 bags of popcorn and 2 bottles of pop are consumed?

Consider Devon's total utility from snorkeling and windsurfing in Table 8.3.1.Suppose that Devon's total income rises from $35 to $55,ceteris paribus.Given that Devon changes his choice of windsurfing and snorkeling,what is his income elasticity for windsurfing?

Advise Sarah how to maximize her utility if MU_A = 8,MU_B = 20,P_A = 4 and P_B = 5.

In consumer equilibrium,a consumer equates the

Consider Devon's total utility from snorkeling and windsurfing in Table 8.3.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,how long does Devon choose to windsurf and to snorkel?

The budget line

As a consumer's income decreases,marginal utility theory predicts that

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility from

Marginal utility equals

Utility is similar to temperature because

Sam buys gasoline and coffee each week.To draw his budget line for gasoline and coffee,Sam needs to know

With a given income and prices of goods,Marcus is in consumer equilibrium when

John and Sally have identical preferences except Sally's utility units are exactly 10 times that of John's.Both have the same income and face the same prices.Choose the best response.

According to the principle of diminishing marginal utility,as consumption of a good increases,total utility

Marginal utility theory assumes that when Kelly decreases the number of hockey games that she attends each week from 3 to 2,her

The budget line shows the boundary between those combinations of goods and services that

Use the table below to answer the following questions. Table 8.1.1 -Refer to Table 8.1.1.The value of B is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 8: Utility and Demand

Ron starts out in consumer equilibrium,consuming two goods,X and Y.Ron's income rises.At this point,we can definitely conclude that

If the price of a good rises,then in the new consumer equilibrium all of the following are true except

Use the table below to answer the following questions. Table 8.2.2 -Refer to Table 8.2.2.What is the total utility if 3 bags of popcorn and 2 bottles of pop are consumed?

Consider Devon's total utility from snorkeling and windsurfing in Table 8.3.1.Suppose that Devon's total income rises from $35 to $55,ceteris paribus.Given that Devon changes his choice of windsurfing and snorkeling,what is his income elasticity for windsurfing?

Advise Sarah how to maximize her utility if MUA = 8,MUB = 20,PA = 4 and PB = 5.

In consumer equilibrium,a consumer equates the

Consider Devon's total utility from snorkeling and windsurfing in Table 8.3.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,how long does Devon choose to windsurf and to snorkel?

The budget line

As a consumer's income decreases,marginal utility theory predicts that

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility from

Marginal utility equals

Utility is similar to temperature because

Sam buys gasoline and coffee each week.To draw his budget line for gasoline and coffee,Sam needs to know

With a given income and prices of goods,Marcus is in consumer equilibrium when

John and Sally have identical preferences except Sally's utility units are exactly 10 times that of John's.Both have the same income and face the same prices.Choose the best response.

According to the principle of diminishing marginal utility,as consumption of a good increases,total utility

Marginal utility theory assumes that when Kelly decreases the number of hockey games that she attends each week from 3 to 2,her

The budget line shows the boundary between those combinations of goods and services that

Use the table below to answer the following questions. Table 8.1.1 -Refer to Table 8.1.1.The value of B is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Advise Sarah how to maximize her utility if MU_A = 8,MU_B = 20,P_A = 4 and P_B = 5.