Question 1

-Marginal utility is the

Accepted Answer

A)  average utility per unit consumed. 
B)  quantity of a good a consumer prefers. 
C)  change in total utility that results from a one-unit increase in the quantity of a good consumed. 
D)  total benefit from the consumption of a good or service. 
E)  change in total utility that results from a one dollar increase in the price of a good consumed. 
A)  average utility per unit consumed. 
B)  quantity of a good a consumer prefers. 
C)  change in total utility that results from a one-unit increase in the quantity of a good consumed. 
D)  total benefit from the consumption of a good or service. 
E)  change in total utility that results from a one dollar increase in the price of a good consumed. C

Question 2

-Which of the above figures reflects an increase in the consumer's budget?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure A and Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure A and Figure D D

Question 3

-If a budget line rotates inward and becomes steeper, then the

Accepted Answer

A)  consumer's budget increased. 
B)  price of one of the goods increased. 
C)  price of one of the goods decreased. 
D)  price of both of the goods must have decreased. 
E)  consumer's budget decreased. 
A)  consumer's budget increased. 
B)  price of one of the goods increased. 
C)  price of one of the goods decreased. 
D)  price of both of the goods must have decreased. 
E)  consumer's budget decreased. B

Question 4

For Jack, the total utility from three shirts is 50 units and the marginal utility of one more shirt is 5. The total utility of four shirts is

Accepted Answer

A)  55/5. 
B)  55. 
C)  55/4. 
D)  45. 
E)  None of the above answers is correct. 
A)  55/5. 
B)  55. 
C)  55/4. 
D)  45. 
E)  None of the above answers is correct.

Question 5

-The above table shows Homer's total utility from boxes of doughnuts. As Homer's consumption of doughnuts increases,

Accepted Answer

A)  his total utility increases, but his marginal utility decreases. 
B)  both his total utility and his marginal utility decrease. 
C)  both his total utility and his marginal utility increase. 
D)  his total utility decreases, but his marginal utility increases. 
E)  None of the above answers is correct. 
A)  his total utility increases, but his marginal utility decreases. 
B)  both his total utility and his marginal utility decrease. 
C)  both his total utility and his marginal utility increase. 
D)  his total utility decreases, but his marginal utility increases. 
E)  None of the above answers is correct.

Question 6

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. The total utility Buffy gets from 5 wooden stakes is

Accepted Answer

A)  7. 
B)  65. 
C)  122. 
D)  222. 
E)  None of the above answers is correct. 
A)  7. 
B)  65. 
C)  122. 
D)  222. 
E)  None of the above answers is correct.

Question 7

Which of the following statements is correct?

Accepted Answer

A)  Along the budget line, consuming more of one good implies consuming more of the other. 
B)  The slope of the budget line shows the opportunity cost of the good measured along the x-axis. 
C)  The slope of the budget line shows there is no tradeoff between the two goods because the consumer can buy each of them. 
D)  If the consumer's budget increases, the budget line shifts leftward and its slope does not change. 
E)  None of the above answers is correct. 
A)  Along the budget line, consuming more of one good implies consuming more of the other. 
B)  The slope of the budget line shows the opportunity cost of the good measured along the x-axis. 
C)  The slope of the budget line shows there is no tradeoff between the two goods because the consumer can buy each of them. 
D)  If the consumer's budget increases, the budget line shifts leftward and its slope does not change. 
E)  None of the above answers is correct.

Question 8

If the price of the good measured on the x-axis becomes relatively cheaper, the budget line will

Accepted Answer

A)  shift rightward and not change its slope. 
B)  become horizontal. 
C)  become vertical. 
D)  become flatter. 
E)  become steeper. 
A)  shift rightward and not change its slope. 
B)  become horizontal. 
C)  become vertical. 
D)  become flatter. 
E)  become steeper.

Question 9

-Moving downward along a demand curve, so that the price falls and the quantity demanded increases, the marginal utility of each additional unit of the good consumed

Accepted Answer

A)  always decreases. 
B)  stays the same. 
C)  always increases. 
D)  at first increases and then decreases. 
E)  could increase, decrease or stay the same. 
A)  always decreases. 
B)  stays the same. 
C)  always increases. 
D)  at first increases and then decreases. 
E)  could increase, decrease or stay the same.

Question 10

-The figure above shows Sarah's budget line. Sarah earns $500 per week selling baskets. With this money she buys sushi and rose bushes. Each piece of sushi costs $1 and each rose bush costs $10. Sarah is NOT able to purchase the combination of

Accepted Answer

A)  50 roses bushes and 0 pieces of sushi. 
B)  30 roses bushes and 300 pieces of sushi. 
C)  0 roses bushes and 300 pieces of sushi. 
D)  20 rose bushes and 200 pieces of sushi. 
E)  None of the above answers is correct because Sarah is able to purchase all the listed combinations of roses and sushi. 
A)  50 roses bushes and 0 pieces of sushi. 
B)  30 roses bushes and 300 pieces of sushi. 
C)  0 roses bushes and 300 pieces of sushi. 
D)  20 rose bushes and 200 pieces of sushi. 
E)  None of the above answers is correct because Sarah is able to purchase all the listed combinations of roses and sushi.

Question 11

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. As Buffy uses more stakes, the marginal utility of a stake ________ and as she uses more cloves of garlic, the marginal utility of a clove of garlic ________.

Accepted Answer

A)  decreases; decreases 
B)  decreases; increases 
C)  increases; decreases 
D)  increases; increases 
E)  does not change; does not change 
A)  decreases; decreases 
B)  decreases; increases 
C)  increases; decreases 
D)  increases; increases 
E)  does not change; does not change

Question 12

Oscar earns $1,000 per week as a fishing guide in Kakadu National Park. With this money he buys fishing lures and steaks. Lures cost $5 each, steaks cost $10 each. If Oscar purchases 124 lures per week, how many steaks can he buy?

Accepted Answer

A)  100 
B)  620 
C)  380 
D)  123 
E)  38 
A)  100 
B)  620 
C)  380 
D)  123 
E)  38

Question 13

-The figure above shows a consumer's budget line between soft drinks and DVD rentals. Point c represents an

Accepted Answer

A)  affordable combination of soft drinks and DVDs that spends the entire budget. 
B)  affordable combination of soft drinks and DVDs that does not spend the entire budget. 
C)  unaffordable combination of soft drinks and DVDs. 
D)  affordable combination of soft drinks and DVDs, but whether it spends the entire budget cannot be determined from the figure. 
E)  None of the above answers is correct. 
A)  affordable combination of soft drinks and DVDs that spends the entire budget. 
B)  affordable combination of soft drinks and DVDs that does not spend the entire budget. 
C)  unaffordable combination of soft drinks and DVDs. 
D)  affordable combination of soft drinks and DVDs, but whether it spends the entire budget cannot be determined from the figure. 
E)  None of the above answers is correct.

Question 14

Suppose Alice spends her entire budget on books and movie downloads. If her budget does not change, and the price of a book stays the same, but the price of a downloaded movie falls, her budget line

Accepted Answer

A)  does not change because her budget has not changed. 
B)  shifts inward and its slope does not change. 
C)  shifts outward and its slope does not change. 
D)  rotates outward and its slope changes. 
E)  rotates inward and its slope changes. 
A)  does not change because her budget has not changed. 
B)  shifts inward and its slope does not change. 
C)  shifts outward and its slope does not change. 
D)  rotates outward and its slope changes. 
E)  rotates inward and its slope changes.

Question 15

Utility is the

Accepted Answer

A)  economic term for consumption possibilities. 
B)  measure of productivity associated with a good or service. 
C)  economic term for how changes in price affect a consumer's purchases. 
D)  measure of how useful a resource is in the production process. 
E)  benefit or satisfaction that a person gets from the consumption of a good or service. 
A)  economic term for consumption possibilities. 
B)  measure of productivity associated with a good or service. 
C)  economic term for how changes in price affect a consumer's purchases. 
D)  measure of how useful a resource is in the production process. 
E)  benefit or satisfaction that a person gets from the consumption of a good or service.

Question 16

-The above table shows Homer's utility from boxes of doughnuts. The marginal utility that Homer receives from the third box of doughnuts is equal to

Accepted Answer

A)  20. 
B)  50. 
C)  75. 
D)  3. 
E)  25. 
A)  20. 
B)  50. 
C)  75. 
D)  3. 
E)  25.

Question 17

-The above table shows Homer's utility from boxes of doughnuts. As Homer's consumption of doughnuts increases, his

Accepted Answer

A)  marginal utility is negative and decreasing. 
B)  marginal utility is negative but increasing. 
C)  total utility is not related to his marginal utility. 
D)  marginal utility is positive but decreasing. 
E)  marginal utility is positive and increasing. 
A)  marginal utility is negative and decreasing. 
B)  marginal utility is negative but increasing. 
C)  total utility is not related to his marginal utility. 
D)  marginal utility is positive but decreasing. 
E)  marginal utility is positive and increasing.

Question 18

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 per can. The table above gives your utility from consuming these two goods. If your income is $20, which of the following consumption combinations will you choose?

Accepted Answer

A)  3 slices of pizza and 4 Diet Pepsis. 
B)  2 slice of pizza and 6 Diet Pepsis. 
C)  5 slices of pizza and no Diet Pepsi. 
D)  4 slices of pizza and 2 Diet Pepsis. 
E)  None of the above answers is correct. 
A)  3 slices of pizza and 4 Diet Pepsis. 
B)  2 slice of pizza and 6 Diet Pepsis. 
C)  5 slices of pizza and no Diet Pepsi. 
D)  4 slices of pizza and 2 Diet Pepsis. 
E)  None of the above answers is correct.

Question 19

-Over the past 10 years, the relative price of petrol has ________. As a result, ________.

Accepted Answer

A)  not changed; the relative prices of other goods have fallen 
B)  increased; the consumption possibilities for petrol have increased 
C)  decreased; the relative prices of other goods have increased 
D)  decreased; consumers have had an incentive to buy more petrol 
E)  increased; consumers have found substitutes for petrol and bought less petrol 
A)  not changed; the relative prices of other goods have fallen 
B)  increased; the consumption possibilities for petrol have increased 
C)  decreased; the relative prices of other goods have increased 
D)  decreased; consumers have had an incentive to buy more petrol 
E)  increased; consumers have found substitutes for petrol and bought less petrol

Question 20

Suppose that Jen receives 400 units of utility from her last soft drink and 200 units of utility from her last slice of pizza. What can we conclude about Jen's choices if the price of a soft drink is $1 and the price of a slice of pizza is $2?

Accepted Answer

A)  Jen needs to buy less soft drink and less pizza to maximise her utility. 
B)  Jen should buy more pizza to maximise her utility. 
C)  Jen should buy more soft drink to maximise her utility. 
D)  Jen is maximising utility because she buys more of the good providing the most utility. 
E)  None of the above answers is correct. 
A)  Jen needs to buy less soft drink and less pizza to maximise her utility. 
B)  Jen should buy more pizza to maximise her utility. 
C)  Jen should buy more soft drink to maximise her utility. 
D)  Jen is maximising utility because she buys more of the good providing the most utility. 
E)  None of the above answers is correct.

-Marginal utility is the

-Which of the above figures reflects an increase in the consumer's budget?

-If a budget line rotates inward and becomes steeper, then the

For Jack, the total utility from three shirts is 50 units and the marginal utility of one more shirt is 5. The total utility of four shirts is

-The above table shows Homer's total utility from boxes of doughnuts. As Homer's consumption of doughnuts increases,

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. The total utility Buffy gets from 5 wooden stakes is

Which of the following statements is correct?

If the price of the good measured on the x-axis becomes relatively cheaper, the budget line will

-Moving downward along a demand curve, so that the price falls and the quantity demanded increases, the marginal utility of each additional unit of the good consumed

-The figure above shows Sarah's budget line. Sarah earns $500 per week selling baskets. With this money she buys sushi and rose bushes. Each piece of sushi costs $1 and each rose bush costs $10. Sarah is NOT able to purchase the combination of

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. As Buffy uses more stakes, the marginal utility of a stake and as she uses more cloves of garlic, the marginal utility of a clove of garlic .

Oscar earns $1,000 per week as a fishing guide in Kakadu National Park. With this money he buys fishing lures and steaks. Lures cost $5 each, steaks cost $10 each. If Oscar purchases 124 lures per week, how many steaks can he buy?

-The figure above shows a consumer's budget line between soft drinks and DVD rentals. Point c represents an

Suppose Alice spends her entire budget on books and movie downloads. If her budget does not change, and the price of a book stays the same, but the price of a downloaded movie falls, her budget line

Utility is the

-The above table shows Homer's utility from boxes of doughnuts. The marginal utility that Homer receives from the third box of doughnuts is equal to

-The above table shows Homer's utility from boxes of doughnuts. As Homer's consumption of doughnuts increases, his

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 per can. The table above gives your utility from consuming these two goods. If your income is $20, which of the following consumption combinations will you choose?

-Over the past 10 years, the relative price of petrol has . As a result, .

Suppose that Jen receives 400 units of utility from her last soft drink and 200 units of utility from her last slice of pizza. What can we conclude about Jen's choices if the price of a soft drink is $1 and the price of a slice of pizza is $2?

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 12: Consumer Choice and Demand

-Marginal utility is the

-Which of the above figures reflects an increase in the consumer's budget?

-If a budget line rotates inward and becomes steeper, then the

For Jack, the total utility from three shirts is 50 units and the marginal utility of one more shirt is 5. The total utility of four shirts is

-The above table shows Homer's total utility from boxes of doughnuts. As Homer's consumption of doughnuts increases,

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. The total utility Buffy gets from 5 wooden stakes is

Which of the following statements is correct?

If the price of the good measured on the x-axis becomes relatively cheaper, the budget line will

-Moving downward along a demand curve, so that the price falls and the quantity demanded increases, the marginal utility of each additional unit of the good consumed

-The figure above shows Sarah's budget line. Sarah earns $500 per week selling baskets. With this money she buys sushi and rose bushes. Each piece of sushi costs $1 and each rose bush costs $10. Sarah is NOT able to purchase the combination of

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. As Buffy uses more stakes, the marginal utility of a stake ________ and as she uses more cloves of garlic, the marginal utility of a clove of garlic ________.

Oscar earns $1,000 per week as a fishing guide in Kakadu National Park. With this money he buys fishing lures and steaks. Lures cost $5 each, steaks cost $10 each. If Oscar purchases 124 lures per week, how many steaks can he buy?

-The figure above shows a consumer's budget line between soft drinks and DVD rentals. Point c represents an

Suppose Alice spends her entire budget on books and movie downloads. If her budget does not change, and the price of a book stays the same, but the price of a downloaded movie falls, her budget line

Utility is the

-The above table shows Homer's utility from boxes of doughnuts. The marginal utility that Homer receives from the third box of doughnuts is equal to

-The above table shows Homer's utility from boxes of doughnuts. As Homer's consumption of doughnuts increases, his

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 per can. The table above gives your utility from consuming these two goods. If your income is $20, which of the following consumption combinations will you choose?

-Over the past 10 years, the relative price of petrol has ________. As a result, ________.

Suppose that Jen receives 400 units of utility from her last soft drink and 200 units of utility from her last slice of pizza. What can we conclude about Jen's choices if the price of a soft drink is $1 and the price of a slice of pizza is $2?

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-The table above shows Buffy's utility from wooden stakes and cloves of garlic. As Buffy uses more stakes, the marginal utility of a stake and as she uses more cloves of garlic, the marginal utility of a clove of garlic .

-Over the past 10 years, the relative price of petrol has . As a result, .