Question 1

Utility is not easy to measure and quantify.

Accepted Answer

A) True 
 B)False  True

Question 2

If the marginal utility per dollar is not the same for each good,the consumer could ________ her utility by spending ________ on goods for which the marginal utility per dollar is higher.

Accepted Answer

A) increase;more 
B) increase;less 
C) decrease;more 
D) minimize;more 
A) increase;more 
B) increase;less 
C) decrease;more 
D) minimize;more A

Question 3

Table 7.3
-Refer to Table 7.3.For the consumer whose preferences are depicted,the marginal utility of the fifth movie is:

Accepted Answer

A) zero. 
B) 12. 
C) 3. 
D) 6. 
A) zero. 
B) 12. 
C) 3. 
D) 6. D

Question 4

The satisfaction experienced from consuming a good or service is referred to as:

Accepted Answer

A) utility. 
B) marginal utility. 
C) the law of diminishing marginal utility. 
D) all of the above 
A) utility. 
B) marginal utility. 
C) the law of diminishing marginal utility. 
D) all of the above

Question 5

The income effect helps explain the shape of a consumer's demand curve.

Accepted Answer

A) True 
 B)False

Question 6

When the price of a good falls,the ratio of the marginal utility of that good divided by its price ________ and as a result,consumers purchase ________ of that good.

Accepted Answer

A) rises;more 
B) falls;more 
C) rises;less 
D) falls;less 
A) rises;more 
B) falls;more 
C) rises;less 
D) falls;less

Question 7

The equimarginal rule:

Accepted Answer

A) equates the marginal utility per dollar spent on each good purchased. 
B) states that in order to maximize utility the consumer should buy more of those goods with a high marginal utility. 
C) states that in order to maximize utility the consumer should buy more of those goods that cost less. 
D) none of the above 
A) equates the marginal utility per dollar spent on each good purchased. 
B) states that in order to maximize utility the consumer should buy more of those goods with a high marginal utility. 
C) states that in order to maximize utility the consumer should buy more of those goods that cost less. 
D) none of the above

Question 8

-Refer to Figure 7.1.The marginal utility of the second movie rental is:

Accepted Answer

A) 10. 
B) 12.5. 
C) 25. 
D) 40. 
A) 10. 
B) 12.5. 
C) 25. 
D) 40.

Question 9

-Refer to Figure 7.2.The marginal utility of the first video game rental is:

Accepted Answer

A) 10. 
B) 8. 
C) 25. 
D) 40. 
A) 10. 
B) 8. 
C) 25. 
D) 40.

Question 10

-Refer to Figure 7.3.The total utility from consuming 2 slices of pie is:

Accepted Answer

A) 12. 
B) 7. 
C) 15. 
D) 4. 
A) 12. 
B) 7. 
C) 15. 
D) 4.

Question 11

As an individual consumes more of a good,total utility increases and marginal utility decreases.

Accepted Answer

A) True 
 B)False

Question 12

Brandon eats four tacos a on a Sunday night but admits each slice of pizza doesn't taste as delicious as the previous one.This suggests that for Brandon:

Accepted Answer

A) the marginal utility of a slice of pizza is positive but decreasing. 
B) the marginal utility of a slice of pizza is negative but increasing. 
C) the total utility of slice of pizza is declining by larger and larger increments. 
D) the total utility of slice of pizza is increasing by larger and larger increments. 
A) the marginal utility of a slice of pizza is positive but decreasing. 
B) the marginal utility of a slice of pizza is negative but increasing. 
C) the total utility of slice of pizza is declining by larger and larger increments. 
D) the total utility of slice of pizza is increasing by larger and larger increments.

Question 13

If marginal utility is positive consuming an additional unit of a product will cause total utility to decline.

Accepted Answer

A) True 
 B)False

Question 14

An increase in price would generate substitution and income effects that decrease the quantity demanded of a particular good.

Accepted Answer

A) True 
 B)False

Question 15

Utility can be thought of as the same as:

Accepted Answer

A) opportunity cost. 
B) satisfaction. 
C) choice. 
D) none of the above. 
A) opportunity cost. 
B) satisfaction. 
C) choice. 
D) none of the above.

Question 16

Table 7.4
-Table 7.4 shows how the total utility that Zach derives from eating candy bars changes as he consumes more and more candy bars each day.Fill in the table.Do the numbers in the table support the law of diminishing marginal utility? Explain.

Accepted Answer

Yes,the numbers in the table s

Question 17

Recall the application about a revenue-neutral gasoline tax,how would a simultaneous increase in the gasoline tax a decrease in the income tax effect gasoline consumption?

Accepted Answer

A) Consumption will decrease. 
B) Consumption will stay the same. 
C) Consumption will increase. 
D) None of the above are correct. 
A) Consumption will decrease. 
B) Consumption will stay the same. 
C) Consumption will increase. 
D) None of the above are correct.

Question 18

The law of diminishing marginal utility implies that demand curves will be upward-sloping.

Accepted Answer

A) True 
 B)False

Question 19

Table 7.1
-Refer to Table 7.1.The marginal utility of the third cup of coffee per day is:

Accepted Answer

A) 35. 
B) 15. 
C) 20. 
D) 25. 
A) 35. 
B) 15. 
C) 20. 
D) 25.

Question 20

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the ________ the price of a product,the ________ the insula activity.

Accepted Answer

A) lower;stronger 
B) higher;stronger 
C) higher;weaker 
D) none of the above 
A) lower;stronger 
B) higher;stronger 
C) higher;weaker 
D) none of the above

Utility is not easy to measure and quantify.

If the marginal utility per dollar is not the same for each good,the consumer could her utility by spending on goods for which the marginal utility per dollar is higher.

Table 7.3 -Refer to Table 7.3.For the consumer whose preferences are depicted,the marginal utility of the fifth movie is:

The satisfaction experienced from consuming a good or service is referred to as:

The income effect helps explain the shape of a consumer's demand curve.

When the price of a good falls,the ratio of the marginal utility of that good divided by its price and as a result,consumers purchase of that good.

The equimarginal rule:

-Refer to Figure 7.1.The marginal utility of the second movie rental is:

-Refer to Figure 7.2.The marginal utility of the first video game rental is:

-Refer to Figure 7.3.The total utility from consuming 2 slices of pie is:

As an individual consumes more of a good,total utility increases and marginal utility decreases.

Brandon eats four tacos a on a Sunday night but admits each slice of pizza doesn't taste as delicious as the previous one.This suggests that for Brandon:

If marginal utility is positive consuming an additional unit of a product will cause total utility to decline.

An increase in price would generate substitution and income effects that decrease the quantity demanded of a particular good.

Utility can be thought of as the same as:

Table 7.4 -Table 7.4 shows how the total utility that Zach derives from eating candy bars changes as he consumes more and more candy bars each day.Fill in the table.Do the numbers in the table support the law of diminishing marginal utility? Explain.

Recall the application about a revenue-neutral gasoline tax,how would a simultaneous increase in the gasoline tax a decrease in the income tax effect gasoline consumption?

The law of diminishing marginal utility implies that demand curves will be upward-sloping.

Table 7.1 -Refer to Table 7.1.The marginal utility of the third cup of coffee per day is:

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the the price of a product,the the insula activity.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 7: Consumer Choice: Utility Theory and Insights From Neuroscience

Utility is not easy to measure and quantify.

If the marginal utility per dollar is not the same for each good,the consumer could ________ her utility by spending ________ on goods for which the marginal utility per dollar is higher.

Table 7.3 -Refer to Table 7.3.For the consumer whose preferences are depicted,the marginal utility of the fifth movie is:

The satisfaction experienced from consuming a good or service is referred to as:

The income effect helps explain the shape of a consumer's demand curve.

When the price of a good falls,the ratio of the marginal utility of that good divided by its price ________ and as a result,consumers purchase ________ of that good.

The equimarginal rule:

-Refer to Figure 7.1.The marginal utility of the second movie rental is:

-Refer to Figure 7.2.The marginal utility of the first video game rental is:

-Refer to Figure 7.3.The total utility from consuming 2 slices of pie is:

As an individual consumes more of a good,total utility increases and marginal utility decreases.

Brandon eats four tacos a on a Sunday night but admits each slice of pizza doesn't taste as delicious as the previous one.This suggests that for Brandon:

If marginal utility is positive consuming an additional unit of a product will cause total utility to decline.

An increase in price would generate substitution and income effects that decrease the quantity demanded of a particular good.

Utility can be thought of as the same as:

Table 7.4 -Table 7.4 shows how the total utility that Zach derives from eating candy bars changes as he consumes more and more candy bars each day.Fill in the table.Do the numbers in the table support the law of diminishing marginal utility? Explain.

Recall the application about a revenue-neutral gasoline tax,how would a simultaneous increase in the gasoline tax a decrease in the income tax effect gasoline consumption?

The law of diminishing marginal utility implies that demand curves will be upward-sloping.

Table 7.1 -Refer to Table 7.1.The marginal utility of the third cup of coffee per day is:

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the ________ the price of a product,the ________ the insula activity.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

If the marginal utility per dollar is not the same for each good,the consumer could her utility by spending on goods for which the marginal utility per dollar is higher.

When the price of a good falls,the ratio of the marginal utility of that good divided by its price and as a result,consumers purchase of that good.

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the the price of a product,the the insula activity.