Question 1

A consumer will maximize utility when all income is spent and the marginal utility is equal for all goods.

Accepted Answer

A) True 
 B)False  False

Question 2

"Diminishing marginal utility means a downward sloping total utility curve." True or false? Explain.

Accepted Answer

A) True 
 B)False  False

Question 3

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $.50 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  five 
B)  six 
C)  seven 
D)  eight 
A)  five 
B)  six 
C)  seven 
D)  eight D

Question 4

The marginal utility from the consumption of a good is equal to the

Accepted Answer

A)  total utility divided by the quantity consumed. 
B)  total utility divided by the price. 
C)  change in total utility divided by the change in the quantity consumed. 
D)  change in total utility divided by the change in price. 
A)  total utility divided by the quantity consumed. 
B)  total utility divided by the price. 
C)  change in total utility divided by the change in the quantity consumed. 
D)  change in total utility divided by the change in price.

Question 5

Sub sandwiches Mountain Dew  
-The above table gives Sue's marginal utility schedules for sub sandwiches and Mountain Dew, the only products Sue consumes. Suppose initially the price of a sub sandwich is $4 each and the price of a Mountain Dew is $2 each. Sue's income is $12. If the price of subs rises to $6 each, Sue will consume

Accepted Answer

A)  more Mountain Dews. 
B)  fewer subs. 
C)  fewer Mountain Dews so that she can still afford to buy two subs. 
D)  Both answers A and B are correct. 
A)  more Mountain Dews. 
B)  fewer subs. 
C)  fewer Mountain Dews so that she can still afford to buy two subs. 
D)  Both answers A and B are correct.

Question 6

-In the table above, which of the following is true?

Accepted Answer

A)  Jim and Sally have increasing marginal utility. 
B)  Jim has increasing marginal utility and Sally has diminishing marginal utility. 
C)  Jim has diminishing marginal utility and Sally has increasing marginal utility. 
D)  Jim and Sally have diminishing marginal utility. 
A)  Jim and Sally have increasing marginal utility. 
B)  Jim has increasing marginal utility and Sally has diminishing marginal utility. 
C)  Jim has diminishing marginal utility and Sally has increasing marginal utility. 
D)  Jim and Sally have diminishing marginal utility.

Question 7

Fritos Fruit drinks  
-The table above shows the total utility from the two goods Freddy likes to consume. The marginal utility Freddy receives from consuming an extra bag of Fritos

Accepted Answer

A)  depends on the quantity of fruit drinks consumed. 
B)  decreases as he consumes more bags of Fritos. 
C)  decreases as he consumes more fruit drinks. 
D)  equals 75 when he consumes 2 bags of Fritos. 
A)  depends on the quantity of fruit drinks consumed. 
B)  decreases as he consumes more bags of Fritos. 
C)  decreases as he consumes more fruit drinks. 
D)  equals 75 when he consumes 2 bags of Fritos.

Question 8

Mark's marginal utility from reading books is the ________ when he reads ________.

Accepted Answer

A)  change in his total utility; one additional book 
B)  total utility he gets; one more book 
C)  change in his total utility; more books 
D)  consumer surplus he gets; books 
A)  change in his total utility; one additional book 
B)  total utility he gets; one more book 
C)  change in his total utility; more books 
D)  consumer surplus he gets; books

Question 9

Emma consumes only tacos and pizza . They are substitute goods for her. The price of a taco falls. Emma will buy ________ tacos and her marginal utility from the last slice of pizza she eats ________.

Accepted Answer

A)  more; does not change 
B)  more; decreases 
C)  the same quantity; does not change 
D)  less; increases 
A)  more; does not change 
B)  more; decreases 
C)  the same quantity; does not change 
D)  less; increases

Question 10

Suppose Jenny's marginal utility of fish is 40 and her marginal utility from chips is 20. The price of fish is $10 and the price of chips is $1. What should Jenny do to maximize her utility? Explain your answer.

Accepted Answer

Jenny should buy more chips and fewer fi

Question 11

As consumption increases, total utility increases

Accepted Answer

A)  at an increasing rate. 
B)  at a decreasing rate. 
C)  at a constant rate. 
D)  and marginal utility increases. 
A)  at an increasing rate. 
B)  at a decreasing rate. 
C)  at a constant rate. 
D)  and marginal utility increases.

Question 12

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  one 
B)  two 
C)  three 
D)  four 
A)  one 
B)  two 
C)  three 
D)  four

Question 13

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  one 
B)  two 
C)  three 
D)  four 
A)  one 
B)  two 
C)  three 
D)  four

Question 14

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from the 3rd Mt. Dew is ________ units.

Accepted Answer

A)  75 
B)  65 
C)  25 
D)  20 
A)  75 
B)  65 
C)  25 
D)  20

Question 15

Apples Tacos  
-Sally derives utility from consuming apples and tacos as shown in the table above. Apples cost $1 each and tacos cost $2 each. If Sally's income is $9, she will consume

Accepted Answer

A)  5 apples and 2 tacos. 
B)  3 apples and 3 tacos. 
C)  1 apple and 4 tacos. 
D)  no apples and 4 1/2 tacos. 
A)  5 apples and 2 tacos. 
B)  3 apples and 3 tacos. 
C)  1 apple and 4 tacos. 
D)  no apples and 4 1/2 tacos.

Question 16

Magazines Chocolate bars  
-Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will ________ and her marginal utility from books will ________.

Accepted Answer

A)  decrease; decrease 
B)  increase; decrease 
C)  decrease; increase 
D)  increase; increase 
A)  decrease; decrease 
B)  increase; decrease 
C)  decrease; increase 
D)  increase; increase

Question 17

Magazines Chocolate bars  
-Sonya's budget for magazines and chocolate bars is $50. Her marginal utility from these goods is shown in the table above. The price of a magazine is $5 and the price of a chocolate bar is $2.50. Sonya currently buys 4 magazines and 12 chocolate bars. To maximize her utility, she should

Accepted Answer

A)  buy more chocolate bars and fewer magazines. 
B)  buy more magazines and fewer chocolate bars. 
C)  buy more of both goods. 
D)  stay with the current combination of goods. 
A)  buy more chocolate bars and fewer magazines. 
B)  buy more magazines and fewer chocolate bars. 
C)  buy more of both goods. 
D)  stay with the current combination of goods.

Question 18

Pizza CDs  
-Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. If Bobby maximizes utility from these goods, his total utility is ________ units.

Accepted Answer

A)  705 
B)  750 
C)  770 
D)  880 
A)  705 
B)  750 
C)  770 
D)  880

Question 19

When Kathryn spends her entire budget and equates marginal utility per dollar across all goods' Kathryn's total utility is maximized.

Accepted Answer

A) True 
 B)False

Question 20

Apples Tacos  
-When you chose to buy the second cup of coffee instead of the third bagel, which of the following is necessarily correct?

Accepted Answer

A)  The second coffee will give you higher marginal utility. 
B)  The second coffee is cheaper than the third bagel. 
C)  The marginal utility per dollar from the third bagel is less than the marginal utility per dollar from the second coffee. 
D)  Both answers A and C are correct. 
A)  The second coffee will give you higher marginal utility. 
B)  The second coffee is cheaper than the third bagel. 
C)  The marginal utility per dollar from the third bagel is less than the marginal utility per dollar from the second coffee. 
D)  Both answers A and C are correct.

Exam 8: Utility and Demand

A consumer will maximize utility when all income is spent and the marginal utility is equal for all goods.

"Diminishing marginal utility means a downward sloping total utility curve." True or false? Explain.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $.50 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

The marginal utility from the consumption of a good is equal to the

-In the table above, which of the following is true?

Fritos Fruit drinks -The table above shows the total utility from the two goods Freddy likes to consume. The marginal utility Freddy receives from consuming an extra bag of Fritos

Mark's marginal utility from reading books is the ________ when he reads ________.

Emma consumes only tacos and pizza . They are substitute goods for her. The price of a taco falls. Emma will buy ________ tacos and her marginal utility from the last slice of pizza she eats ________.

Suppose Jenny's marginal utility of fish is 40 and her marginal utility from chips is 20. The price of fish is $10 and the price of chips is $1. What should Jenny do to maximize her utility? Explain your answer.

As consumption increases, total utility increases

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from the 3rd Mt. Dew is ________ units.

Apples Tacos -Sally derives utility from consuming apples and tacos as shown in the table above. Apples cost $1 each and tacos cost $2 each. If Sally's income is $9, she will consume

Magazines Chocolate bars -Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will ________ and her marginal utility from books will ________.

Pizza CDs -Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. If Bobby maximizes utility from these goods, his total utility is ________ units.

When Kathryn spends her entire budget and equates marginal utility per dollar across all goods' Kathryn's total utility is maximized.

Apples Tacos -When you chose to buy the second cup of coffee instead of the third bagel, which of the following is necessarily correct?

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

Mark's marginal utility from reading books is the when he reads .

Emma consumes only tacos and pizza . They are substitute goods for her. The price of a taco falls. Emma will buy tacos and her marginal utility from the last slice of pizza she eats .

Magazines Chocolate bars -Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will and her marginal utility from books will .