Question 1

Market demand is identical to individual demand.

Accepted Answer

A) True 
 B)False

Question 2

All of the possible combinations of two goods that lie on one indifference curve

Accepted Answer

A) Give the consumer the highest possible utility. 
B) Yield the same level of utility. 
C) Are affordable. 
D) Yield the same level of marginal utility. 
A) Give the consumer the highest possible utility. 
B) Yield the same level of utility. 
C) Are affordable. 
D) Yield the same level of marginal utility.

Question 3

Table 19.2 $\begin{array}{c}
\begin{array}{|c|}
\hline\text { Quantity Consumed }\
\hline1 \
\hline 2 \
\hline 3 \
\hline 4\
\hline
\end{array}
\begin{array}{c|}
\hline\text { Total Utility}\
\hline15\
\hline\
\hline30\
\hline\
\hline
\end{array}
\begin{array}{c|}
\hline\text { Marginal Utility}\
\hline15\
\hline9\
\hline\
\hline3\
\hline
\end{array}

\end{array}$

In Table 19.2,the total utility when four units are consumed is

Accepted Answer

A) 33. 
B) 30. 
C) 6. 
D) 3. 
A) 33. 
B) 30. 
C) 6. 
D) 3.

Question 4

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $1,the optimal consumption is found at point

Accepted Answer

A) B 
B) D. 
C) E. 
D) C. 
A) B 
B) D. 
C) E. 
D) C.

Question 5

A consumer maximizes total utility from a given amount of income when the

Accepted Answer

A) Marginal utility per dollar obtained from the last unit of each good is the same. 
B) Marginal utility of the last unit of each good is the same. 
C) Total utility obtained from each product is the same. 
D) Amount spent for each product is the same. 
A) Marginal utility per dollar obtained from the last unit of each good is the same. 
B) Marginal utility of the last unit of each good is the same. 
C) Total utility obtained from each product is the same. 
D) Amount spent for each product is the same.

Question 6

An indifference curve shows the

Accepted Answer

A) Maximum utility that can be achieved for a given consumer budget. 
B) Maximum utility that can be achieved for different amounts of a good. 
C) Combinations of goods giving equal utility to a consumer. 
D) Optimal consumption combinations between two goods. 
A) Maximum utility that can be achieved for a given consumer budget. 
B) Maximum utility that can be achieved for different amounts of a good. 
C) Combinations of goods giving equal utility to a consumer. 
D) Optimal consumption combinations between two goods.

Question 7

If the marginal utility per dollar spent for candy bars is higher than the marginal utility per dollar spent for popcorn,you should buy more popcorn and fewer candy bars in order to maximize utility.

Accepted Answer

A) True 
 B)False

Question 8

Sellers can gain profits from price discrimination because

Accepted Answer

A) Charging different prices based on willingness to pay can increase revenues without increasing costs. 
B) Total expenses are less with price discrimination. 
C) Total revenues are maximized when all buyers pay the same price. 
D) Different prices charged to different customers can lower total revenue. 
A) Charging different prices based on willingness to pay can increase revenues without increasing costs. 
B) Total expenses are less with price discrimination. 
C) Total revenues are maximized when all buyers pay the same price. 
D) Different prices charged to different customers can lower total revenue.

Question 9

Any point on the budget constraint

Accepted Answer

A) Gives the consumer the highest level of utility. 
B) Represent a combination of two goods that are affordable. 
C) Represents combinations of two goods that yield the same utility. 
D) Reflects the price of one good divided by the price of another good. 
A) Gives the consumer the highest level of utility. 
B) Represent a combination of two goods that are affordable. 
C) Represents combinations of two goods that yield the same utility. 
D) Reflects the price of one good divided by the price of another good.

Question 10

If there is no budget constraint,utility maximization is achieved when marginal utility is zero.

Accepted Answer

A) True 
 B)False

Question 11

See Figure 19.1.Lu's consumer surplus is equal to

Accepted Answer

A) $100. 
B) $200. 
C) $300. 
D) $500. 
A) $100. 
B) $200. 
C) $300. 
D) $500.

Question 12

Most goods can yield

Accepted Answer

A) Only positive marginal utility. 
B) Both positive and negative marginal utility. 
C) Only negative marginal utility. 
D) Only zero marginal utility. 
A) Only positive marginal utility. 
B) Both positive and negative marginal utility. 
C) Only negative marginal utility. 
D) Only zero marginal utility.

Question 13

Refer to Figure 19.1.The total consumer surplus in this market is equal to

Accepted Answer

A) $950. 
B) $900. 
C) $850. 
D) $800. 
A) $950. 
B) $900. 
C) $850. 
D) $800.

Question 14

The law of diminishing marginal utility states that

Accepted Answer

A) The total utility of consuming the next unit of a good falls. 
B) As a consumer enjoys successive units of a good,eventually marginal utility will fall. 
C) Marginal utility always falls to zero after two or three units of a good consumed. 
D) The total utility of a good rises at a fast rate as more units of a good are consumed. 
A) The total utility of consuming the next unit of a good falls. 
B) As a consumer enjoys successive units of a good,eventually marginal utility will fall. 
C) Marginal utility always falls to zero after two or three units of a good consumed. 
D) The total utility of a good rises at a fast rate as more units of a good are consumed.

Question 15

Refer to Figure 19.2.Diminishing marginal utility begins after

Accepted Answer

A) The fourth apple. 
B) The fifth apple. 
C) The third apple. 
D) The first apple. 
A) The fourth apple. 
B) The fifth apple. 
C) The third apple. 
D) The first apple.

Question 16

Price discrimination is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 17

Using the concept of the budget constraint and indifference curves,explain how a consumer maximizes total utility.

Accepted Answer

Rational consumers maximize total utilit

Question 18

If advertising is successful,

Accepted Answer

A) The demand becomes more elastic. 
B) The demand curve shifts to the left. 
C) The demand curve shifts to the right and becomes steeper. 
D) The demand curve shifts to the left,and demand becomes more price-elastic. 
A) The demand becomes more elastic. 
B) The demand curve shifts to the left. 
C) The demand curve shifts to the right and becomes steeper. 
D) The demand curve shifts to the left,and demand becomes more price-elastic.

Question 19

If a product has a high marginal utility,then

Accepted Answer

A) Consumers will not purchase any more of the good. 
B) The demand curve will be downward-sloping. 
C) A consumer is willing to pay a high price for it. 
D) Consumers will also have a low total utility. 
A) Consumers will not purchase any more of the good. 
B) The demand curve will be downward-sloping. 
C) A consumer is willing to pay a high price for it. 
D) Consumers will also have a low total utility.

Question 20

The law of diminishing marginal utility suggests that

Accepted Answer

A) People are willing to buy additional quantities of a good only if its price falls. 
B) People will substitute lower-priced goods for more expensive goods,ceteris paribus. 
C) Price and quantity demanded are directly related. 
D) As marginal utility decreases,the willingness to pay increases. 
A) People are willing to buy additional quantities of a good only if its price falls. 
B) People will substitute lower-priced goods for more expensive goods,ceteris paribus. 
C) Price and quantity demanded are directly related. 
D) As marginal utility decreases,the willingness to pay increases.

Exam 19: Consumer Choice

Market demand is identical to individual demand.

All of the possible combinations of two goods that lie on one indifference curve

Table 19.2 Quantity Consumed 1 2 3 4 Total Utility 15 30 Marginal Utility 15 9 3 In Table 19.2,the total utility when four units are consumed is

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $1,the optimal consumption is found at point

A consumer maximizes total utility from a given amount of income when the

An indifference curve shows the

If the marginal utility per dollar spent for candy bars is higher than the marginal utility per dollar spent for popcorn,you should buy more popcorn and fewer candy bars in order to maximize utility.

Sellers can gain profits from price discrimination because

Any point on the budget constraint

If there is no budget constraint,utility maximization is achieved when marginal utility is zero.

See Figure 19.1.Lu's consumer surplus is equal to

Most goods can yield

Refer to Figure 19.1.The total consumer surplus in this market is equal to

The law of diminishing marginal utility states that

Refer to Figure 19.2.Diminishing marginal utility begins after

Price discrimination is illegal in the United States.

Using the concept of the budget constraint and indifference curves,explain how a consumer maximizes total utility.

If advertising is successful,

If a product has a high marginal utility,then

The law of diminishing marginal utility suggests that

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