Question 1

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

Accepted Answer

A)  is greater than 50. 
B)  equals 50. 
C)  is less than 50. 
D)  might be more than, less than, or equal to 50 but more information is needed. 
A)  is greater than 50. 
B)  equals 50. 
C)  is less than 50. 
D)  might be more than, less than, or equal to 50 but more information is needed.

Question 2

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. If the price of a magazine is $5 and the price of a chocolate bar is $2.50, which of the following combinations maximizes Sonya's utility?

Accepted Answer

A)  1 magazine and 18 chocolate bars 
B)  2 magazines and 20 chocolate bars 
C)  3 magazines and 14 chocolate bars 
D)  5 magazines and 10 chocolate bars 
A)  1 magazine and 18 chocolate bars 
B)  2 magazines and 20 chocolate bars 
C)  3 magazines and 14 chocolate bars 
D)  5 magazines and 10 chocolate bars

Question 3

Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a Mountain Dew increases,

Accepted Answer

A)  Sue's demand curve for sub sandwiches will shift rightward. 
B)  Sue will move downward along her demand curve for Mountain Dews. 
C)  Sue will move upward along her demand curve for Mountain Dews. 
D)  Both answers A and C are correct. 
A)  Sue's demand curve for sub sandwiches will shift rightward. 
B)  Sue will move downward along her demand curve for Mountain Dews. 
C)  Sue will move upward along her demand curve for Mountain Dews. 
D)  Both answers A and C are correct.

Question 4

Joe consumes pizza and movies. Pizza and movies are substitutes. According to marginal utility theory, if the price of a pizza rises then

Accepted Answer

A)  the demand curve for pizza shifts leftward. 
B)  the demand curve for pizza shifts leftward and the demand curve for movies shifts rightward. 
C)  there is an upward movement along the demand curve for pizza. 
D)  there is an upward movement along the demand curve for pizza and the demand curve for movies shifts rightward. 
A)  the demand curve for pizza shifts leftward. 
B)  the demand curve for pizza shifts leftward and the demand curve for movies shifts rightward. 
C)  there is an upward movement along the demand curve for pizza. 
D)  there is an upward movement along the demand curve for pizza and the demand curve for movies shifts rightward.

Question 5

Marginal utility theory concludes that a decrease in the price of a good increases the quantity demanded and

Accepted Answer

A)  increases the demand for substitutes. 
B)  decreases the demand for complements. 
C)  increases the total expenditure on the good. 
D)  increases total utility. 
A)  increases the demand for substitutes. 
B)  decreases the demand for complements. 
C)  increases the total expenditure on the good. 
D)  increases total utility.

Question 6

The paradox of value can be resolved by distinguishing between

Accepted Answer

A)  quantity demanded and quantity supplied. 
B)  supply and quantity supplied. 
C)  normative and positive statements. 
D)  total utility and marginal utility. 
A)  quantity demanded and quantity supplied. 
B)  supply and quantity supplied. 
C)  normative and positive statements. 
D)  total utility and marginal utility.

Question 7

-The above table shows Tammy's total utility from videos and CDs. If Tammy has $70 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

Accepted Answer

A)  450. 
B)  1280. 
C)  1150. 
D)  1200. 
A)  450. 
B)  1280. 
C)  1150. 
D)  1200.

Question 8

Which of the following is NOT an assumption of marginal utility theory?

Accepted Answer

A)  A consumer derives utility from the goods consumed. 
B)  Each additional unit of consumption yields additional utility. 
C)  Consumers maximize their total utility. 
D)  As more of a good is consumed, the decrease in the marginal utility from the good means that the total utility from the good decreases also. 
A)  A consumer derives utility from the goods consumed. 
B)  Each additional unit of consumption yields additional utility. 
C)  Consumers maximize their total utility. 
D)  As more of a good is consumed, the decrease in the marginal utility from the good means that the total utility from the good decreases also.

Question 9

Pizza Pepsi  
-The table shows Elaine's utility from pizza and Pepsi. If Elaine consumes 2 slices of pizza and 3 Pepsis, her marginal utility from the fourth Pepsi is ________ units.

Accepted Answer

A)  60 
B)  54 
C)  40 
D)  220 
A)  60 
B)  54 
C)  40 
D)  220

Question 10

A consumer's total utility is maximized when the total utility per dollar from all goods is equalized.

Accepted Answer

A) True 
 B)False

Question 11

Lucky buys hats for $20 but Lucky will not sell one of her hats for less than $35. Lucky is ________.

Accepted Answer

A)  displaying the endowment effect 
B)  making decisions using her prefrontal cortex 
C)  exhibiting bounded self-interest 
D)  showing unbounded will power 
A)  displaying the endowment effect 
B)  making decisions using her prefrontal cortex 
C)  exhibiting bounded self-interest 
D)  showing unbounded will power

Question 12

-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the quantity of water and the quantity of hamburgers that will maximize the consumer's total utility?

Accepted Answer

A)  5 bottles of water and 4 hamburgers 
B)  4 bottles of water and 4 hamburgers 
C)  1 bottle of water and 6 hamburgers 
D)  6 bottles of water and 6 hamburgers 
A)  5 bottles of water and 4 hamburgers 
B)  4 bottles of water and 4 hamburgers 
C)  1 bottle of water and 6 hamburgers 
D)  6 bottles of water and 6 hamburgers

Question 13

What is the utility-maximizing rule?

Accepted Answer

The utility-maximizing rule states that

Question 14

Apples Tacos  
-Sasha derives utility from consuming apples and tacos as shown in the table above. Apples cost $1 each and tacos cost $2 each. If Sasha's income is $8, he will consume

Accepted Answer

A)  4 apples and 2 tacos. 
B)  2 apples and 3 tacos. 
C)  0 apples and 4 tacos. 
D)  3 apples and 3 tacos. 
A)  4 apples and 2 tacos. 
B)  2 apples and 3 tacos. 
C)  0 apples and 4 tacos. 
D)  3 apples and 3 tacos.

Question 15

Neuroeconomics is

Accepted Answer

A)  the study of the activity of a human brain when the person makes economic decision. 
B)  the study of how people behave when they face scarcity. 
C)  the study of situations in which people act economically irrationally. 
D)  the study of how people make decisions at the margin. 
A)  the study of the activity of a human brain when the person makes economic decision. 
B)  the study of how people behave when they face scarcity. 
C)  the study of situations in which people act economically irrationally. 
D)  the study of how people make decisions at the margin.

Question 16

The principle of diminishing marginal utility can be used to explain why

Accepted Answer

A)  Bob's second soda is less enjoyable than his first soda. 
B)  Bob's first soda is less enjoyable than his second soda. 
C)  Charlie enjoys his fourth soda less than Bob enjoys his first. 
D)  Bob enjoys his first soda more than Charlie enjoys his fourth. 
A)  Bob's second soda is less enjoyable than his first soda. 
B)  Bob's first soda is less enjoyable than his second soda. 
C)  Charlie enjoys his fourth soda less than Bob enjoys his first. 
D)  Bob enjoys his first soda more than Charlie enjoys his fourth.

Question 17

Sergio consumes only beef and snails and is maximizing his utility. If the price of beef is less than the price of snails, then we definitely know that

Accepted Answer

A)  Sergio buys more beef than snails. 
B)  Sergio buys more snails than beef. 
C)  the marginal utility from the last pound of beef purchased is greater than the marginal utility from the last pound of snails purchased. 
D)  the marginal utility from the last pound of snails purchased is greater than the marginal utility from the last pound of beef purchased. 
A)  Sergio buys more beef than snails. 
B)  Sergio buys more snails than beef. 
C)  the marginal utility from the last pound of beef purchased is greater than the marginal utility from the last pound of snails purchased. 
D)  the marginal utility from the last pound of snails purchased is greater than the marginal utility from the last pound of beef purchased.

Question 18

Marginal Utility  
-Lily has $10 to spend each week on fish and chicken. Fish costs $2 a serving and chicken costs $3 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume ________ servings of chicken and ________ of fish each week.

Accepted Answer

A)  4; 0 
B)  1; 3 
C)  0; 5 
D)  2; 2 
A)  4; 0 
B)  1; 3 
C)  0; 5 
D)  2; 2

Question 19

As an individual's consumption of a good increases,

Accepted Answer

A)  his or her total utility increases. 
B)  his or her marginal utility increases. 
C)  the price of the good increases. 
D)  All of the above answers are correct. 
A)  his or her total utility increases. 
B)  his or her marginal utility increases. 
C)  the price of the good increases. 
D)  All of the above answers are correct.

Question 20

At 37, actor Matthew McConaughey says he only needs "friends and family" to keep him happy and that he avoids "false drama" at all costs. How do you maintain that bod? "I don't really have a workout regimen I follow. I just live my life. My goal is to break a sweat each day." People June 25, 2007
Mr. McConaughey says he only needs friends and family and to break a sweat each day to keep him happy. The table above shows the total utility he gets from spending time with friends and family and breaking a sweat.
-Which statement is true about Mr. McConaughey's marginal utility from spending time with family and friends and breaking a sweat?

Accepted Answer

A)  The marginal utility Mr. McConaughey gets from the first hour of spending time with his family is less than the marginal utility from the first hour of breaking a sweat. 
B)  The marginal utility Mr. McConaughey gets from the third hour of spending time with his family is less than the marginal utility from the fourth hour of breaking a sweat. 
C)  The marginal utility Mr. McConaughey gets from the fourth hour of spending time with his family is greater than the marginal utility from the fourth hour of breaking a sweat. 
D)  The marginal utility Mr. McConaughey gets from the second hour of spending time with his family is greater than the marginal utility from the first hour of breaking a sweat. 
A)  The marginal utility Mr. McConaughey gets from the first hour of spending time with his family is less than the marginal utility from the first hour of breaking a sweat. 
B)  The marginal utility Mr. McConaughey gets from the third hour of spending time with his family is less than the marginal utility from the fourth hour of breaking a sweat. 
C)  The marginal utility Mr. McConaughey gets from the fourth hour of spending time with his family is greater than the marginal utility from the fourth hour of breaking a sweat. 
D)  The marginal utility Mr. McConaughey gets from the second hour of spending time with his family is greater than the marginal utility from the first hour of breaking a sweat.

Exam 8: Utility and Demand

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

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. If the price of a magazine is $5 and the price of a chocolate bar is $2.50, which of the following combinations maximizes Sonya's utility?

Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a Mountain Dew increases,

Joe consumes pizza and movies. Pizza and movies are substitutes. According to marginal utility theory, if the price of a pizza rises then

Marginal utility theory concludes that a decrease in the price of a good increases the quantity demanded and

The paradox of value can be resolved by distinguishing between

-The above table shows Tammy's total utility from videos and CDs. If Tammy has $70 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

Which of the following is NOT an assumption of marginal utility theory?

Pizza Pepsi -The table shows Elaine's utility from pizza and Pepsi. If Elaine consumes 2 slices of pizza and 3 Pepsis, her marginal utility from the fourth Pepsi is ________ units.

A consumer's total utility is maximized when the total utility per dollar from all goods is equalized.

Lucky buys hats for $20 but Lucky will not sell one of her hats for less than $35. Lucky is ________.

-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the quantity of water and the quantity of hamburgers that will maximize the consumer's total utility?

What is the utility-maximizing rule?

Apples Tacos -Sasha derives utility from consuming apples and tacos as shown in the table above. Apples cost $1 each and tacos cost $2 each. If Sasha's income is $8, he will consume

Neuroeconomics is

The principle of diminishing marginal utility can be used to explain why

Sergio consumes only beef and snails and is maximizing his utility. If the price of beef is less than the price of snails, then we definitely know that

Marginal Utility -Lily has $10 to spend each week on fish and chicken. Fish costs $2 a serving and chicken costs $3 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume ________ servings of chicken and ________ of fish each week.

As an individual's consumption of a good increases,

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

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Extension C: Review

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Marginal Utility -Lily has $10 to spend each week on fish and chicken. Fish costs $2 a serving and chicken costs $3 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume servings of chicken and of fish each week.