Question 1

Bianca consumes pizza.Marginal utility theory predicts that when the price of pizza increases,

Accepted Answer

A) Bianca's total utility from pizza will increase. 
B) Bianca's marginal utility from pizza will not change. 
C) Bianca's demand curve for pizza will shift leftward. 
D) Bianca will buy less pizza. 
E) C and D are correct. 
A) Bianca's total utility from pizza will increase. 
B) Bianca's marginal utility from pizza will not change. 
C) Bianca's demand curve for pizza will shift leftward. 
D) Bianca will buy less pizza. 
E) C and D are correct.

Question 2

Use the table below to answer the following questions.
Table 8.1.1
 $\begin{array}{ll}\text { Quantity }&\text {Total Utility }&\text {Marginal Utility }\
0 & 0&30 \
1 & 30&12 \
2 & A&5 \
3 & B&C \
4 & 50
\end{array}$
-Refer to Table 8.1.1.The value of C is

Accepted Answer

A) 0. 
B) 13. 
C) 17. 
D) 50. 
E) 3. 
A) 0. 
B) 13. 
C) 17. 
D) 50. 
E) 3.

Question 3

Max has $35 a day to spend,and he can spend as much time as he likes on his leisure pursuits.Windsurfing equipment rents for $10 an hour,and snorkeling equipment rents for $5 an hour.If Max equalizes the marginal utility per hour from windsurfing and from snorkeling,he

Accepted Answer

A) maximizes his total utility. 
B) can increase his total utility by spending less time windsurfing and more time snorkeling. 
C) can increase his total utility only if the price of windsurfing equipment rentals decreases. 
D) can increase his total utility by spending more time windsurfing and less time snorkeling. 
E) maximizes his marginal utility per dollar. 
A) maximizes his total utility. 
B) can increase his total utility by spending less time windsurfing and more time snorkeling. 
C) can increase his total utility only if the price of windsurfing equipment rentals decreases. 
D) can increase his total utility by spending more time windsurfing and less time snorkeling. 
E) maximizes his marginal utility per dollar.

Question 4

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour,snorkeling equipment for $5 per hour.
 $$\begin{array}{l}
\hline  \text { Hours }&\text { Total Utility }&\text { Total Utility }\\text { per Month }&\text { from Windsurfing }&\text { from Snorkeling }\
\hline 1 & 60 & 20 \
2 & 110 & 38 \
3 & 150 & 53 \
4 & 180 & 64 \
5 & 200 & 70
\end{array}$$
-Devon enjoys windsurfing and snorkeling.His total utility from each activity is summarized in Table 8.2.1.Devon has $35 to spend.How long will Devon choose to windsurf and to snorkel?

Accepted Answer

A) 1 hour windsurfing and 5 hours snorkeling 
B) 2 hours windsurfing and 3 hours snorkeling 
C) 3 hours windsurfing and 1 hour snorkeling 
D) 4 hours windsurfing and no hours snorkeling 
E) 2 hour windsurfing and 4 hours snorkeling 
A) 1 hour windsurfing and 5 hours snorkeling 
B) 2 hours windsurfing and 3 hours snorkeling 
C) 3 hours windsurfing and 1 hour snorkeling 
D) 4 hours windsurfing and no hours snorkeling 
E) 2 hour windsurfing and 4 hours snorkeling

Question 5

Harold can consume either pens or milkshakes.The price of a pen is $1,and the price of a milkshake is $1.Harold figures that when his income is spent,his marginal utility from pens will be 10 and his marginal utility from milkshakes will be 8.Harold is better off

Accepted Answer

A) by consuming more pens and fewer milkshakes. 
B) by consuming more pens and more milkshakes. 
C) by consuming fewer pens and fewer milkshakes. 
D) by consuming fewer pens and more milkshakes. 
E) only if he makes more income. 
A) by consuming more pens and fewer milkshakes. 
B) by consuming more pens and more milkshakes. 
C) by consuming fewer pens and fewer milkshakes. 
D) by consuming fewer pens and more milkshakes. 
E) only if he makes more income.

Question 6

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour,snorkeling equipment for $5 per hour.
 $$\begin{array}{l}
\hline  \text { Hours }&\text { Total Utility }&\text { Total Utility }\\text { per Month }&\text { from Windsurfing }&\text { from Snorkeling }\
\hline 1 & 60 & 20 \
2 & 110 & 38 \
3 & 150 & 53 \
4 & 180 & 64 \
5 & 200 & 70
\end{array}$$
-Consider Devon's utility from snorkeling and windsurfing in Table 8.2.1.Devon has $55 to spend.What are Devon's choices for time spent on the two activities?

Accepted Answer

A) 1 hour of windsurfing and 9 hours of snorkeling 
B) 2 hours of windsurfing and 7 hours of snorkeling 
C) 3 hours of windsurfing and 5 hours of snorkeling 
D) 4 hours of windsurfing and 3 hours of snorkeling 
E) 5 hours of windsurfing and 1 hour of snorkeling 
A) 1 hour of windsurfing and 9 hours of snorkeling 
B) 2 hours of windsurfing and 7 hours of snorkeling 
C) 3 hours of windsurfing and 5 hours of snorkeling 
D) 4 hours of windsurfing and 3 hours of snorkeling 
E) 5 hours of windsurfing and 1 hour of snorkeling

Question 7

The paradox of value

Accepted Answer

A) is that values are the same for different people. 
B) is that economists can calculate marginal utility,even though utility is unmeasurable. 
C) is resolved by an appeal to the law of diminishing total utility. 
D) remains unresolved by economists. 
E) is resolved by an appeal to the difference between marginal utility and total utility. 
A) is that values are the same for different people. 
B) is that economists can calculate marginal utility,even though utility is unmeasurable. 
C) is resolved by an appeal to the law of diminishing total utility. 
D) remains unresolved by economists. 
E) is resolved by an appeal to the difference between marginal utility and total utility.

Question 8

Chuck and Barry have identical total utility schedules but Chuck has a much higher income.If each is maximizing his total utility,then

Accepted Answer

A) they will have equal total utilities. 
B) Chuck will have lower total utility than Barry. 
C) Chuck will have lower marginal utility than Barry for each normal good consumed. 
D) Chuck will have higher marginal utility than Barry for each normal good consumed. 
E) they will have equal marginal utilities for each normal good consumed. 
A) they will have equal total utilities. 
B) Chuck will have lower total utility than Barry. 
C) Chuck will have lower marginal utility than Barry for each normal good consumed. 
D) Chuck will have higher marginal utility than Barry for each normal good consumed. 
E) they will have equal marginal utilities for each normal good consumed.

Question 9

If a consumer's income increases and if all goods are normal goods,

Accepted Answer

A) the quantity bought of each good decreases. 
B) the quantity bought of some normal goods increases and of other normal goods decreases,but we can't make an accurate prediction. 
C) some goods become inferior because it isn't possible to buy all goods. 
D) the quantity bought of each good increases. 
E) the supply of all goods increases and the marginal utility from all goods decreases. 
A) the quantity bought of each good decreases. 
B) the quantity bought of some normal goods increases and of other normal goods decreases,but we can't make an accurate prediction. 
C) some goods become inferior because it isn't possible to buy all goods. 
D) the quantity bought of each good increases. 
E) the supply of all goods increases and the marginal utility from all goods decreases.

Question 10

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

Accepted Answer

A) additional utility. 
B) marginal utility. 
C) average utility. 
D) marginal utility per dollar. 
E) fractional utility. 
A) additional utility. 
B) marginal utility. 
C) average utility. 
D) marginal utility per dollar. 
E) fractional utility.

Question 11

For a consumer to maximize utility from a given income,

Accepted Answer

A) the marginal utility from each good must be maximized. 
B) the total utility from each good must be maximized. 
C) the marginal utilities of all goods and services consumed must be equal. 
D) the marginal utility per dollar from all goods and services consumed must be equal. 
E) the amount of each good consumed per dollar must be equal. 
A) the marginal utility from each good must be maximized. 
B) the total utility from each good must be maximized. 
C) the marginal utilities of all goods and services consumed must be equal. 
D) the marginal utility per dollar from all goods and services consumed must be equal. 
E) the amount of each good consumed per dollar must be equal.

Question 12

Gene plays another hour of computer games rather than study for the hour even though he knows that the next day when he takes his test he will regret his decision.Gene is showing

Accepted Answer

A) the endowment effect. 
B) bounded rationality. 
C) bounded self-interest. 
D) bounded will-power. 
E) bad judgment. 
A) the endowment effect. 
B) bounded rationality. 
C) bounded self-interest. 
D) bounded will-power. 
E) bad judgment.

Question 13

Let MUA and MUB stand for the marginal utility of goods A and B,respectively.Let PA and PB stand for the price of goods A and B,respectively.Which statement must hold for consumer equilibrium?

Accepted Answer

A) MUA = MUB 
B) MUA = MUB and PA = PB 
C) MUA/MUB = PB/PA 
D) MUA/MUB = PA/PB 
E) MUAPA = MUBPB 
A) MUA = MUB 
B) MUA = MUB and PA = PB 
C) MUA/MUB = PB/PA 
D) MUA/MUB = PA/PB 
E) MUAPA = MUBPB

Question 14

Use the table below to answer the following question.
Table 8.2.4
 $$\begin{array}{l}
\text { Units of } X&\text { Total Utility } ( X ) & \text { Units of } Y & \text { Total Utility } ( Y ) \
0 & 0 & 0 & 0 \
1 & 9 & 1 & 49 \
2 & 17 & 2 & 90 \
3 & 24 & 3 & 110 \
4 & 30 & 4 & 118 \
5 & 35 & 5 & 124 \
6 & 39 & 6 & 129 \
7 & 42 & 7 & 132 \
8 & 44 & 8 & 133
\end{array}$$
-Refer to Table 8.2.4.Suppose the price of X is $1 and the price of Y is $1.How much of each should you purchase to maximize utility from a total expenditure of $11?

Accepted Answer

A) 3 units of X and 8 units of Y 
B) 4 units of X and 7 units of Y 
C) 5 units of X and 6 units of Y 
D) 6 units of X and 5 units of Y 
E) 7 units of X and 4 units of Y 
A) 3 units of X and 8 units of Y 
B) 4 units of X and 7 units of Y 
C) 5 units of X and 6 units of Y 
D) 6 units of X and 5 units of Y 
E) 7 units of X and 4 units of Y

Question 15

A consumer maximizes his utility by purchasing 2 units of good X at $5 per unit and 3 units of good Y at $7 per unit.What is the ratio of the marginal utility from X to the marginal utility from Y?

Accepted Answer

A) 5/7 
B) 7/5 
C) 2/3 
D) 3/2 
E) 10/21 
A) 5/7 
B) 7/5 
C) 2/3 
D) 3/2 
E) 10/21

Question 16

Geneva is not at her consumer equilibrium for movies and music downloads.Why?

Accepted Answer

A) Her average utility from movies does not equal her average utility from music downloads. 
B) Her total utility from movies does not equal her total utility from music downloads. 
C) Her marginal utility from the last movie she attended does not equal her marginal utility from the last music download she downloaded. 
D) Her average utility from movies does not equal her total utility from music downloads. 
E) Her marginal utility per dollar from the last movie she attended does not equal her marginal utility per dollar from the last music download she downloaded. 
A) Her average utility from movies does not equal her average utility from music downloads. 
B) Her total utility from movies does not equal her total utility from music downloads. 
C) Her marginal utility from the last movie she attended does not equal her marginal utility from the last music download she downloaded. 
D) Her average utility from movies does not equal her total utility from music downloads. 
E) Her marginal utility per dollar from the last movie she attended does not equal her marginal utility per dollar from the last music download she downloaded.

Question 17

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MUh be the marginal utility of hamburgers and MUp be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MUh/MUp equal?

Accepted Answer

A) 1/5 
B) 5/1 
C) 1/1 
D) 1/6 
E) 4 
A) 1/5 
B) 5/1 
C) 1/1 
D) 1/6 
E) 4

Question 18

The paradox of value as it applies to diamonds and water can be explained by

Accepted Answer

A) distinguishing between utility and price. 
B) water having a high level of marginal utility relative to diamonds. 
C) water having a low price relative to diamonds. 
D) the fact that utility can't be measured. 
E) distinguishing between total utility and marginal utility. 
A) distinguishing between utility and price. 
B) water having a high level of marginal utility relative to diamonds. 
C) water having a low price relative to diamonds. 
D) the fact that utility can't be measured. 
E) distinguishing between total utility and marginal utility.

Question 19

Suppose you are consuming hot dogs and Cokes and believe you are receiving maximum total utility from the meal for your entire budget of $12.The price of a hot dog is $2 and the price of a Coke is $2.Which one of the following can you conclude?

Accepted Answer

A) The total utility from hot dogs is maximized. 
B) The marginal utilities from hot dogs and Cokes divided by the quantity of each good must be equal. 
C) The total utilities from hot dogs and Cokes must be equal. 
D) You are purchasing three hot dogs and three Cokes. 
E) The marginal utilities from hot dogs and Cokes must be equal. 
A) The total utility from hot dogs is maximized. 
B) The marginal utilities from hot dogs and Cokes divided by the quantity of each good must be equal. 
C) The total utilities from hot dogs and Cokes must be equal. 
D) You are purchasing three hot dogs and three Cokes. 
E) The marginal utilities from hot dogs and Cokes must be equal.

Question 20

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

Bianca consumes pizza.Marginal utility theory predicts that when the price of pizza increases,

Use the table below to answer the following questions. Table 8.1.1 Quantity Total Utility Marginal Utility 0 0 30 1 30 12 2 A 5 3 B C 4 50 -Refer to Table 8.1.1.The value of C is

Max has $35 a day to spend,and he can spend as much time as he likes on his leisure pursuits.Windsurfing equipment rents for $10 an hour,and snorkeling equipment rents for $5 an hour.If Max equalizes the marginal utility per hour from windsurfing and from snorkeling,he

Harold can consume either pens or milkshakes.The price of a pen is $1,and the price of a milkshake is $1.Harold figures that when his income is spent,his marginal utility from pens will be 10 and his marginal utility from milkshakes will be 8.Harold is better off

The paradox of value

Chuck and Barry have identical total utility schedules but Chuck has a much higher income.If each is maximizing his total utility,then

If a consumer's income increases and if all goods are normal goods,

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

For a consumer to maximize utility from a given income,

Gene plays another hour of computer games rather than study for the hour even though he knows that the next day when he takes his test he will regret his decision.Gene is showing

Let MU_A and MU_B stand for the marginal utility of goods A and B,respectively.Let P_A and P_B stand for the price of goods A and B,respectively.Which statement must hold for consumer equilibrium?

A consumer maximizes his utility by purchasing 2 units of good X at $5 per unit and 3 units of good Y at $7 per unit.What is the ratio of the marginal utility from X to the marginal utility from Y?

Geneva is not at her consumer equilibrium for movies and music downloads.Why?

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MU_h be the marginal utility of hamburgers and MU_p be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MU_h/MU_p equal?

The paradox of value as it applies to diamonds and water can be explained by

Suppose you are consuming hot dogs and Cokes and believe you are receiving maximum total utility from the meal for your entire budget of $12.The price of a hot dog is $2 and the price of a Coke is $2.Which one of the following can you conclude?

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

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 8: Utility and Demand

Bianca consumes pizza.Marginal utility theory predicts that when the price of pizza increases,

Use the table below to answer the following questions. Table 8.1.1 Quantity Total Utility Marginal Utility 0 0 30 1 30 12 2 A 5 3 B C 4 50 -Refer to Table 8.1.1.The value of C is

Max has $35 a day to spend,and he can spend as much time as he likes on his leisure pursuits.Windsurfing equipment rents for $10 an hour,and snorkeling equipment rents for $5 an hour.If Max equalizes the marginal utility per hour from windsurfing and from snorkeling,he

Harold can consume either pens or milkshakes.The price of a pen is $1,and the price of a milkshake is $1.Harold figures that when his income is spent,his marginal utility from pens will be 10 and his marginal utility from milkshakes will be 8.Harold is better off

The paradox of value

Chuck and Barry have identical total utility schedules but Chuck has a much higher income.If each is maximizing his total utility,then

If a consumer's income increases and if all goods are normal goods,

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

For a consumer to maximize utility from a given income,

Gene plays another hour of computer games rather than study for the hour even though he knows that the next day when he takes his test he will regret his decision.Gene is showing

Let MUA and MUB stand for the marginal utility of goods A and B,respectively.Let PA and PB stand for the price of goods A and B,respectively.Which statement must hold for consumer equilibrium?

A consumer maximizes his utility by purchasing 2 units of good X at $5 per unit and 3 units of good Y at $7 per unit.What is the ratio of the marginal utility from X to the marginal utility from Y?

Geneva is not at her consumer equilibrium for movies and music downloads.Why?

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MUh be the marginal utility of hamburgers and MUp be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MUh/MUp equal?

The paradox of value as it applies to diamonds and water can be explained by

Suppose you are consuming hot dogs and Cokes and believe you are receiving maximum total utility from the meal for your entire budget of $12.The price of a hot dog is $2 and the price of a Coke is $2.Which one of the following can you conclude?

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

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Let MU_A and MU_B stand for the marginal utility of goods A and B,respectively.Let P_A and P_B stand for the price of goods A and B,respectively.Which statement must hold for consumer equilibrium?

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MU_h be the marginal utility of hamburgers and MU_p be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MU_h/MU_p equal?