Question 1

The high price of diamonds relative to the price of water reflects the fact that,at typical levels of consumption,

Accepted Answer

A) the total utility of water is relatively low. 
B) the total utility of diamonds is relatively high. 
C) the marginal utility of water is high. 
D) the marginal utility of diamonds is relatively low. 
E) None of the above is true. 
A) the total utility of water is relatively low. 
B) the total utility of diamonds is relatively high. 
C) the marginal utility of water is high. 
D) the marginal utility of diamonds is relatively low. 
E) None of the above is true.

Question 2

Sergio is maximizing utility in his consumption of beer and bubblegum.If the price of beer is greater than the price of bubblegum,then we know

Accepted Answer

A) Sergio buys more beer than bubblegum. 
B) Sergio buys more bubblegum than beer. 
C) the marginal utility from the last purchased beer is greater than the marginal utility from the last purchased bubblegum. 
D) the marginal utility from the last purchased bubblegum is greater than the marginal utility from the last purchased beer. 
E) the marginal utilities from the last purchased beer and bubblegum are equal. 
A) Sergio buys more beer than bubblegum. 
B) Sergio buys more bubblegum than beer. 
C) the marginal utility from the last purchased beer is greater than the marginal utility from the last purchased bubblegum. 
D) the marginal utility from the last purchased bubblegum is greater than the marginal utility from the last purchased beer. 
E) the marginal utilities from the last purchased beer and bubblegum are equal.

Question 3

The value of a good relates to

Accepted Answer

A) total utility,while price relates to consumer surplus. 
B) consumer surplus,while price relates to total utility. 
C) marginal utility,while price relates to consumer surplus. 
D) marginal utility,while price relates to total utility. 
E) total utility,while price relates to marginal utility. 
A) total utility,while price relates to consumer surplus. 
B) consumer surplus,while price relates to total utility. 
C) marginal utility,while price relates to consumer surplus. 
D) marginal utility,while price relates to total utility. 
E) total utility,while price relates to marginal utility.

Question 4

Danny has $12 to spend on two goods: pies and pop.The price of a pie is $4,and the price of a can of pop is $2.To maximize his utility,Danny buys

Accepted Answer

A) 2 pies and 2 cans of pop. 
B) 3 pies and no pop. 
C) the combination that gives him the same marginal utility per dollar on pies as on pop. 
D) 6 cans of pop and no pie. 
E) the combination that gives him the same total utility from pies as from pop. 
A) 2 pies and 2 cans of pop. 
B) 3 pies and no pop. 
C) the combination that gives him the same marginal utility per dollar on pies as on pop. 
D) 6 cans of pop and no pie. 
E) the combination that gives him the same total utility from pies as from pop.

Question 5

What is marginal utility?

Accepted Answer

A) The change in total utility divided by the price of a good. 
B) The maximum amount of satisfaction from consuming a good. 
C) The total satisfaction received from consuming as much of the good that is available for consumption. 
D) The additional satisfaction received from consuming one more unit of a good. 
E) The change in the price of a good divided by the change in total utility. 
A) The change in total utility divided by the price of a good. 
B) The maximum amount of satisfaction from consuming a good. 
C) The total satisfaction received from consuming as much of the good that is available for consumption. 
D) The additional satisfaction received from consuming one more unit of a good. 
E) The change in the price of a good divided by the change in total utility.

Question 6

Other things remaining the same,marginal utility theory implies that a rise in the price of a good

Accepted Answer

A) increases the consumer surplus. 
B) decreases the consumer surplus. 
C) leaves consumer surplus unchanged. 
D) has an effect on consumer surplus that cannot be determined. 
E) decreases consumer surplus by the amount equal to the total utility of all goods consumed before the price rise but not after the price rise. 
A) increases the consumer surplus. 
B) decreases the consumer surplus. 
C) leaves consumer surplus unchanged. 
D) has an effect on consumer surplus that cannot be determined. 
E) decreases consumer surplus by the amount equal to the total utility of all goods consumed before the price rise but not after the price rise.

Question 7

If income falls,then in the new consumer equilibrium

Accepted Answer

A) the marginal utility from normal goods increases. 
B) the marginal utility from normal goods decreases. 
C) the marginal utility from inferior goods increases. 
D) total utility from normal goods increases. 
E) both B and C. 
A) the marginal utility from normal goods increases. 
B) the marginal utility from normal goods decreases. 
C) the marginal utility from inferior goods increases. 
D) total utility from normal goods increases. 
E) both B and C.

Question 8

Utility is

Accepted Answer

A) the value of a good. 
B) the additional satisfaction received from consuming another unit of a good. 
C) the benefit or satisfaction from consuming goods and services. 
D) the practical usefulness of a good. 
E) equal to the price of a good. 
A) the value of a good. 
B) the additional satisfaction received from consuming another unit of a good. 
C) the benefit or satisfaction from consuming goods and services. 
D) the practical usefulness of a good. 
E) equal to the price of a good.

Question 9

Which one of the following is not true in consumer equilibrium?

Accepted Answer

A) The total utilities of all goods are equal. 
B) The consumer is maximizing utility,given her income and the prices of goods and services. 
C) The marginal utility per dollar is equal for all goods. 
D) Given prices and her income,the consumer finds that any other choice of goods to consume would lower her utility. 
E) The consumer will not change her choices unless prices or income change. 
A) The total utilities of all goods are equal. 
B) The consumer is maximizing utility,given her income and the prices of goods and services. 
C) The marginal utility per dollar is equal for all goods. 
D) Given prices and her income,the consumer finds that any other choice of goods to consume would lower her utility. 
E) The consumer will not change her choices unless prices or income change.

Question 10

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 total utility from snorkeling and windsurfing in Table 8.2.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,how long does Devon choose to windsurf and to snorkel?

Accepted Answer

A) 1 hour of windsurfing and 3 hours of snorkeling 
B) 2 hour 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 3 hours of snorkeling 
B) 2 hour 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

The high price of diamonds relative to the price of water reflects the fact that,at typical levels of consumption,

Sergio is maximizing utility in his consumption of beer and bubblegum.If the price of beer is greater than the price of bubblegum,then we know

The value of a good relates to

Danny has $12 to spend on two goods: pies and pop.The price of a pie is $4,and the price of a can of pop is $2.To maximize his utility,Danny buys

What is marginal utility?

Other things remaining the same,marginal utility theory implies that a rise in the price of a good

If income falls,then in the new consumer equilibrium

Utility is

Which one of the following is not true in consumer equilibrium?

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

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Exam 8: Utility and Demand

The high price of diamonds relative to the price of water reflects the fact that,at typical levels of consumption,

Sergio is maximizing utility in his consumption of beer and bubblegum.If the price of beer is greater than the price of bubblegum,then we know

The value of a good relates to

Danny has $12 to spend on two goods: pies and pop.The price of a pie is $4,and the price of a can of pop is $2.To maximize his utility,Danny buys

What is marginal utility?

Other things remaining the same,marginal utility theory implies that a rise in the price of a good

If income falls,then in the new consumer equilibrium

Utility is

Which one of the following is not true in consumer equilibrium?

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