Question 1

If income rises,then in the new consumer equilibrium

Accepted Answer

A) the marginal utility from normal goods increases. 
B) the marginal utility from normal goods decreases. 
C) the marginal utility from inferior goods increases. 
D) total utility from inferior goods increases. 
E) both B and C 
A) the marginal utility from normal goods increases. 
B) the marginal utility from normal goods decreases. 
C) the marginal utility from inferior goods increases. 
D) total utility from inferior goods increases. 
E) both B and C

Question 2

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MUh be the marginal utility of hamburgers and MUp be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MUh/MUp equal?

Accepted Answer

A) 1/5 
B) 5/1 
C) 1/1 
D) 1/6 
E) 4 
A) 1/5 
B) 5/1 
C) 1/1 
D) 1/6 
E) 4

Question 3

Total utility equals

Accepted Answer

A) the sum of the marginal utilities of each unit consumed. 
B) the area below the demand curve but above the market price. 
C) the slope of the marginal utility curve. 
D) the marginal utility of the last unit divided by price. 
E) the marginal utility of the last unit consumed multiplied by the total number of units consumed. 
A) the sum of the marginal utilities of each unit consumed. 
B) the area below the demand curve but above the market price. 
C) the slope of the marginal utility curve. 
D) the marginal utility of the last unit divided by price. 
E) the marginal utility of the last unit consumed multiplied by the total number of units consumed.

Question 4

If Ms.Petersen is maximizing her utility in the consumption of goods A and B,which one of the following statements must be true?

Accepted Answer

A) MUA = MUB 
B) MUA/PA = MUB/PB 
C) MUA/PB = MUB/PA 
D) TUA = TUB 
E) TUA/PA = TUB/PB 
A) MUA = MUB 
B) MUA/PA = MUB/PB 
C) MUA/PB = MUB/PA 
D) TUA = TUB 
E) TUA/PA = TUB/PB

Question 5

Which of the following barriers to rational choices are studied by behavioural economics?

Accepted Answer

A) bounded rationality 
B) bounded willpower 
C) bounded self-interest 
D) the endowment effect 
E) all of the above 
A) bounded rationality 
B) bounded willpower 
C) bounded self-interest 
D) the endowment effect 
E) all of the above

Question 6

If income falls,then in the new consumer equilibrium

Accepted Answer

A) the marginal utility from normal goods increases. 
B) the marginal utility from normal goods decreases. 
C) the marginal utility from inferior goods increases. 
D) total utility from normal goods increases. 
E) total utility from inferior goods decreases. 
A) the marginal utility from normal goods increases. 
B) the marginal utility from normal goods decreases. 
C) the marginal utility from inferior goods increases. 
D) total utility from normal goods increases. 
E) total utility from inferior goods decreases.

Question 7

The high price of diamonds relative to the price of water reflects the fact that,at typical levels of consumption,

Accepted Answer

A) the total utility from water is relatively low. 
B) the total utility from diamonds is relatively high. 
C) the marginal utility from water is high. 
D) the marginal utility from diamonds is relatively low. 
E) the marginal utility from diamonds is greater than the marginal utility from water. 
A) the total utility from water is relatively low. 
B) the total utility from diamonds is relatively high. 
C) the marginal utility from water is high. 
D) the marginal utility from diamonds is relatively low. 
E) the marginal utility from diamonds is greater than the marginal utility from water.

Question 8

Which one of the following statements is true?

Accepted Answer

A) Since consumers of a good consume this good until the price equals the value of the last unit,they clearly get no benefit from consuming this good. 
B) Consumers choosing between goods X and Y will set MUX = MUY. 
C) The value of a good to a consumer is measured by the price. 
D) Consumer surplus on a unit of a good will never be zero. 
E) If the marginal utility per dollar from good X is less than the marginal utility per dollar from good Y,then the consumer should shift some spending from X to Y. 
A) Since consumers of a good consume this good until the price equals the value of the last unit,they clearly get no benefit from consuming this good. 
B) Consumers choosing between goods X and Y will set MUX = MUY. 
C) The value of a good to a consumer is measured by the price. 
D) Consumer surplus on a unit of a good will never be zero. 
E) If the marginal utility per dollar from good X is less than the marginal utility per dollar from good Y,then the consumer should shift some spending from X to Y.

Question 9

Cindy has $70 a month to spend,and she can spend as much time as she likes playing golf and tennis.The price of an hour of golf is $10,and the price of an hour of tennis is $5.If Cindy equalizes the marginal utility per hour from golf and from tennis,she

Accepted Answer

A) can increase her total utility by spending less time golfing and more time playing tennis. 
B) can increase her total utility by spending more time golfing and less time playing tennis. 
C) maximizes her total utility. 
D) can increase her total utility only if the price of golf decreases. 
E) cannot increase her total utility. 
A) can increase her total utility by spending less time golfing and more time playing tennis. 
B) can increase her total utility by spending more time golfing and less time playing tennis. 
C) maximizes her total utility. 
D) can increase her total utility only if the price of golf decreases. 
E) cannot increase her total utility.

Question 10

Utility is

Accepted Answer

A) the value of a good. 
B) the additional satisfaction received from consuming another unit of a good. 
C) the benefit or satisfaction from consuming goods and services. 
D) the practical usefulness of a good. 
E) equal to the price of a good. 
A) the value of a good. 
B) the additional satisfaction received from consuming another unit of a good. 
C) the benefit or satisfaction from consuming goods and services. 
D) the practical usefulness of a good. 
E) equal to the price of a good.

Question 11

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

Accepted Answer

A) additional utility. 
B) marginal utility. 
C) average utility. 
D) marginal utility per dollar. 
E) fractional utility. 
A) additional utility. 
B) marginal utility. 
C) average utility. 
D) marginal utility per dollar. 
E) fractional utility.

Question 12

For a consumer to maximize utility from a given income,

Accepted Answer

A) the marginal utility from each good must be maximized. 
B) the total utility from each good must be maximized. 
C) the marginal utilities of all goods and services consumed must be equal. 
D) the marginal utility per dollar from all goods and services consumed must be equal. 
E) the amount of each good consumed per dollar must be equal. 
A) the marginal utility from each good must be maximized. 
B) the total utility from each good must be maximized. 
C) the marginal utilities of all goods and services consumed must be equal. 
D) the marginal utility per dollar from all goods and services consumed must be equal. 
E) the amount of each good consumed per dollar must be equal.

Question 13

If the price of a good falls,then in the new consumer equilibrium

Accepted Answer

A) the marginal utility from consuming the good will be higher than before. 
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 fall in price. 
E) none of the above 
A) the marginal utility from consuming the good will be higher than before. 
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 fall in price. 
E) none of the above

Question 14

Which one of the following is not true in consumer equilibrium?

Accepted Answer

A) The total utilities of all goods are equal. 
B) The consumer is maximizing utility,given her income and the prices of goods and services. 
C) The marginal utility per dollar is equal for all goods. 
D) Given prices and her income,the consumer finds that any other choice of goods to consume would lower her utility. 
E) The consumer will not change her choices unless prices or income change. 
A) The total utilities of all goods are equal. 
B) The consumer is maximizing utility,given her income and the prices of goods and services. 
C) The marginal utility per dollar is equal for all goods. 
D) Given prices and her income,the consumer finds that any other choice of goods to consume would lower her utility. 
E) The consumer will not change her choices unless prices or income change.

Question 15

Sergio is maximizing utility in his consumption of beer and bubble gum.If the price of beer is greater than the price of bubble gum,then we know

Accepted Answer

A) Sergio buys more beer than bubble gum. 
B) Sergio buys more bubble gum than beer. 
C) the marginal utility from the last purchased beer is greater than the marginal utility from the last purchased bubble gum. 
D) the marginal utility from the last purchased bubble gum is greater than the marginal utility from the last purchased beer. 
E) the marginal utilities from the last purchased beer and bubble gum are equal. 
A) Sergio buys more beer than bubble gum. 
B) Sergio buys more bubble gum than beer. 
C) the marginal utility from the last purchased beer is greater than the marginal utility from the last purchased bubble gum. 
D) the marginal utility from the last purchased bubble gum is greater than the marginal utility from the last purchased beer. 
E) the marginal utilities from the last purchased beer and bubble gum are equal.

Question 16

Ron starts out in consumer equilibrium,consuming two goods,X and Y.The price of X rises.Immediately after the rise in price

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) MUX/PX > MUY/PY,and then Ron increases his consumption of X and Y. 
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) MUX/PX > MUY/PY,and then Ron increases his consumption of X and Y.

If income rises,then in the new consumer equilibrium

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MU_h be the marginal utility of hamburgers and MU_p be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MU_h/MU_p equal?

Total utility equals

If Ms.Petersen is maximizing her utility in the consumption of goods A and B,which one of the following statements must be true?

Which of the following barriers to rational choices are studied by behavioural economics?

If income falls,then in the new consumer equilibrium

The high price of diamonds relative to the price of water reflects the fact that,at typical levels of consumption,

Which one of the following statements is true?

Cindy has $70 a month to spend,and she can spend as much time as she likes playing golf and tennis.The price of an hour of golf is $10,and the price of an hour of tennis is $5.If Cindy equalizes the marginal utility per hour from golf and from tennis,she

Utility is

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

For a consumer to maximize utility from a given income,

If the price of a good falls,then in the new consumer equilibrium

Which one of the following is not true in consumer equilibrium?

Sergio is maximizing utility in his consumption of beer and bubble gum.If the price of beer is greater than the price of bubble gum,then we know

Ron starts out in consumer equilibrium,consuming two goods,X and Y.The price of X rises.Immediately after the rise in price

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

If income rises,then in the new consumer equilibrium

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MUh be the marginal utility of hamburgers and MUp be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MUh/MUp equal?

Total utility equals

If Ms.Petersen is maximizing her utility in the consumption of goods A and B,which one of the following statements must be true?

Which of the following barriers to rational choices are studied by behavioural economics?

If income falls,then in the new consumer equilibrium

The high price of diamonds relative to the price of water reflects the fact that,at typical levels of consumption,

Which one of the following statements is true?

Cindy has $70 a month to spend,and she can spend as much time as she likes playing golf and tennis.The price of an hour of golf is $10,and the price of an hour of tennis is $5.If Cindy equalizes the marginal utility per hour from golf and from tennis,she

Utility is

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

For a consumer to maximize utility from a given income,

If the price of a good falls,then in the new consumer equilibrium

Which one of the following is not true in consumer equilibrium?

Sergio is maximizing utility in his consumption of beer and bubble gum.If the price of beer is greater than the price of bubble gum,then we know

Ron starts out in consumer equilibrium,consuming two goods,X and Y.The price of X rises.Immediately after the rise in price

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

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MU_h be the marginal utility of hamburgers and MU_p be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MU_h/MU_p equal?