Question 1

A successful advertising campaign will

Accepted Answer

A) Increase the demand for the advertised good. 
B) Increase the absolute value of the price elasticity of demand for the advertised good. 
C) Cause the quantity supplied of the advertised good to increase. 
D) Reduce the perceived utility of the good. 
A) Increase the demand for the advertised good. 
B) Increase the absolute value of the price elasticity of demand for the advertised good. 
C) Cause the quantity supplied of the advertised good to increase. 
D) Reduce the perceived utility of the good.

Question 2

Consumer surplus measures

Accepted Answer

A) The difference between the maximum price a consumer is willing to pay and the price actually paid. 
B) The difference between the minimum price a consumer is willing to pay and the price actually paid. 
C) The difference between the amounts of a good a consumer is willing to pay,and how much of the good is available for sale. 
D) The sum of all of the marginal utilities for that good 
A) The difference between the maximum price a consumer is willing to pay and the price actually paid. 
B) The difference between the minimum price a consumer is willing to pay and the price actually paid. 
C) The difference between the amounts of a good a consumer is willing to pay,and how much of the good is available for sale. 
D) The sum of all of the marginal utilities for that good

Question 3

Total utility is

Accepted Answer

A) The additional utility from consuming one more unit of a good. 
B) The sum of the marginal utilities from the consumption of good. 
C) A function that always falls as a buyer enjoys more units of a good. 
D) How much utility a seller gets from producing a good. 
A) The additional utility from consuming one more unit of a good. 
B) The sum of the marginal utilities from the consumption of good. 
C) A function that always falls as a buyer enjoys more units of a good. 
D) How much utility a seller gets from producing a good.

Question 4

The mix of consumer purchases that maximizes the utility attainable from available income is called the

Accepted Answer

A) Total utility combination. 
B) Marginal utility combination. 
C) Optimal consumption. 
D) Maximum consumption. 
A) Total utility combination. 
B) Marginal utility combination. 
C) Optimal consumption. 
D) Maximum consumption.

Question 5

The slope of the indifference curve is equal to the

Accepted Answer

A) Ratio of the price of one good to the price of the other good. 
B) Income of the consumer. 
C) Marginal rate of substitution. 
D) Slope of the demand curve. 
A) Ratio of the price of one good to the price of the other good. 
B) Income of the consumer. 
C) Marginal rate of substitution. 
D) Slope of the demand curve.

Question 6

Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Accepted Answer

A) True 
 B)False

Question 7

Total utility is maximized when

Accepted Answer

A) Price is less than marginal utility. 
B) Price is equal to marginal utility. 
C) Marginal utility is zero. 
D) Marginal utility is maximized. 
A) Price is less than marginal utility. 
B) Price is equal to marginal utility. 
C) Marginal utility is zero. 
D) Marginal utility is maximized.

Question 8

An indifference curve represents combinations of two goods that provide an individual the same total utility.

Accepted Answer

A) True 
 B)False

Question 9

When a rational consumer has stopped buying,she or he will have allocated a limited budget so that the marginal utility per good will be the same.

Accepted Answer

A) True 
 B)False

Question 10

The In the News article titled "Men vs.Women: How They Spend" differentiates the spending habits of women and men: "Men spend almost twice as much as women do on electronic equipment … young women spend twice as much money on clothing,personal care items,and their pets." Which determinant of demand is most likely involved?

Accepted Answer

A) Income. 
B) Tastes. 
C) Expectations. 
D) Other goods (availability and prices). 
A) Income. 
B) Tastes. 
C) Expectations. 
D) Other goods (availability and prices).

Question 11

Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c } 
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 46 & 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ In Table 19.3,what is the marginal utility of the fifth unit of cola?

Accepted Answer

A) 6. 
B) 12. 
C) 16. 
D) 24. 
A) 6. 
B) 12. 
C) 16. 
D) 24.

Question 12

Maximum utility is achieved when

Accepted Answer

A) Total revenue is the greatest. 
B) The price elasticity of demand is 1.0. 
C) Marginal utility is zero. 
D) Total utility equals marginal utility. 
A) Total revenue is the greatest. 
B) The price elasticity of demand is 1.0. 
C) Marginal utility is zero. 
D) Total utility equals marginal utility.

Question 13

Price discrimination

Accepted Answer

A) Is illegal. 
B) Rarely occurs in the airline industry. 
C) Is a way for sellers to elicit the maximum willingness to pay from buyers. 
D) Is a method used by sellers to pit one buyer against the other. 
A) Is illegal. 
B) Rarely occurs in the airline industry. 
C) Is a way for sellers to elicit the maximum willingness to pay from buyers. 
D) Is a method used by sellers to pit one buyer against the other.

Question 14

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 $3,the consumer would maximize utility by consuming

Accepted Answer

A) 30 units of Y. 
B) 21 units of Y. 
C) 10 units of Y. 
D) 25 units of Y. 
A) 30 units of Y. 
B) 21 units of Y. 
C) 10 units of Y. 
D) 25 units of Y.

Question 15

The law of diminishing marginal utility gives us a deeper understanding of the downward-sloping demand curve because

Accepted Answer

A) Consumers are willing to pay a higher price for a greater quantity. 
B) Consumer tastes change due to advertising. 
C) When marginal utility is high,we are willing to pay a higher price. 
D) Consumers do not respond to a change in price. 
A) Consumers are willing to pay a higher price for a greater quantity. 
B) Consumer tastes change due to advertising. 
C) When marginal utility is high,we are willing to pay a higher price. 
D) Consumers do not respond to a change in price.

Question 16

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 two units are consumed is

Accepted Answer

A) 6. 
B) 9. 
C) 15. 
D) 24. 
A) 6. 
B) 9. 
C) 15. 
D) 24.

Exam 19: Consumer Choice

A successful advertising campaign will

Consumer surplus measures

Total utility is

The mix of consumer purchases that maximizes the utility attainable from available income is called the

The slope of the indifference curve is equal to the

Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Total utility is maximized when

An indifference curve represents combinations of two goods that provide an individual the same total utility.

When a rational consumer has stopped buying,she or he will have allocated a limited budget so that the marginal utility per good will be the same.

Maximum utility is achieved when

Price discrimination

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 $3,the consumer would maximize utility by consuming

The law of diminishing marginal utility gives us a deeper understanding of the downward-sloping demand curve because

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 two units are consumed is

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