Exam 8: Utility and Demand

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 2 magazines and 16 chocolate bars. To maximize her utility, she should

-If the price of a good increases, all else the same, then the consumer's total utility will

"Because the price of a diamond is much greater than the price of a gallon of water, the consumer surplus from diamonds is greater than the consumer surplus from water." Is the previous analysis correct? Explain your answer.

-Tom spends $20 a month on CDs and magazines. The price of a CD is $6 and the price of a magazine is $4. When Tom maximizes his utility, the marginal utility from CDs is ________ the marginal utility from newspapers.

The Denver Broncos is a football team in the NFL, the Colorado Crush was an arena football team, and the Highlands Ranch Falcons is a local High School team. Broncos tickets cost about $415, Crush tickets cost between $30 and $85 and Falcons tickets are $6. What does marginal utility theory predict about the marginal utility per dollar from each of these football games?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. A soda costs $1.00. What is the marginal utility per dollar spent when the eighth soda is purchased?

Ricardo buys cola and popcorn. Cola sells for $0.50 a can and popcorn sells for $1 per bag. He is in consumer equilibrium. The price of a cola jumps to $1 per can. In his new consumer equilibrium, Ricardo's

-The above table shows Tammy's total utility from videos and CDs. If Tammy has $110 to spend on videos and CDs and if the price of a video is $10 and the price of a CD is $20, then the maximum utility Tammy can attain is

"I really enjoy watching movies. The first one is best. After that I still enjoy movies but the last one is not as much fun to watch as the one before it." This statement reflects the

The state Department of Agriculture raised the minimum price for a gallon of milk in the city on Tuesday to $4.37. "If you've got two or three kids and you're living on a fixed income and you're paying half your income on rent," Gioia said, "then you're really in a bind and you're making choices you should never have to make." If even after this price increase Gioia's marginal utility per dollar is higher for milk than for other goods, what should Gioia do?

Jeannie's marginal utility from her 4th book in a month is 50. Her marginal utility from her 5th book

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods. If your income is $20, which of the following consumption combinations will you choose?

________ is the additional satisfaction a person receives from consuming an extra unit of a good.

For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer.

Apples Tacos -When Frankie spends all his money in such a way that the marginal utility per dollar is the same for all final purchases of products he consumes, Frankie has maximized

Apples Tacos -As long as the marginal utility per dollar from pizza is greater than the marginal utility per dollar from soda, then to maximize utility a consumer will buy

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 $1.00 each. What is Tom's total utility at his consumer equilibrium?

Marginal utility is the

If a consumer spends all of his or her income and the marginal utility per dollar is equal for all goods, then

-In the figure above, the marginal utility of the third crate of tomatoes for the person with total utility curve C is