Exam 8: Utility and Demand

Bags of Popcorn Bottles of soda -Jenny buys sodas and popcorn. Sodas sell for $1 and popcorn sells for $2 a bag. Currently she is in consumer equilibrium, with the marginal utility from her last dollar spent on popcorn equal to 100 units of utility. The marginal utility from her last dollar spent on sodas is

The principle of diminishing marginal utility implies that the

-In the figure above, the curve that shows the diminishing marginal utility is

The total utility you get from eating slices of pizza on a given night is the

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. -Does Mr. McConaughey's marginal utility from spending time with family and friends and from breaking a sweat obey the principle of diminishing marginal utility?

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. -Jake has already bought his hockey gear for the season, but when he is in the sports store, he falls in love with a different hockey stick and buys it even though it means he can't go out to dinner later with his friends which he would have preferred. This example illustrates the ________ aspect of behavioral economics.

Your marginal utility from a hamburger

-Kelly's marginal utilities for magazines and packages of gummy bears are listed in the table above. For Kelly, what is the total utility received from consuming 5 magazines?

Suppose that Alyssa spends all her income on video games and DVDs and her marginal utility per dollar from video games equals that from DVDs. Is Alyssa maximizing her utility? Now, suppose that the price of a DVD falls. Should Alyssa change the combination of goods she consumes? If yes, how? Explain.

If Sean thinks that the choice between going to Olive Garden or Red Lobster is simply too confusing, a behavioral economist will explain that Sean is showing ________.

Does the fact that diamonds, which we do not need to survive, are more expensive than water, which is a necessity, constitute a violation of utility maximization?

-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10 and Jane's budget is $88. What is Jane's total utility when she maximizes her utility?

The cost of basics like milk, bread, potatoes and bananas has jumped in the past year, forcing families to nix luxuries, steer away from organic goods and buy more house brands. "I think it's affecting everybody," said Elize Joseph 48, a nursing attendant. "To spend $40 on groceries is nothing. It doesn't go a long way." When food prices increase, what will happen to Elize's total utility?

The total benefit that a person receives from the consumption of goods and services is called

Apples Tacos -To maximize her utility, Pat should spend all of her money and buy goods in a way that

Marginal utility theory predicts that

-Julie's total utility from cheeseburgers is given in the table above. What is the marginal utility of the third cheeseburger?

When economists speak of normal goods they mean goods for which

If it costs $6.00 to go to the movies and $25.00 to go to a hockey game, Tom is maximizing his utility between movies and hockey if his marginal utility of movies is 12 units and his marginal utility from hockey is 25.

We can explain the paradox of value as follows: The consumer surplus from water, which is cheap, is ________ than the consumer surplus from gold, which is expensive; the total utility from gold is ________ than the total utility from water; and the marginal utility per dollar spent on water ________ the marginal utility per dollar spent on gold.