Question 1

The paradox of value asks why

Accepted Answer

A) bad things happen to good people. 
B) the price of water is low and the price of a diamond is high, but water is essential to life while diamonds are not. 
C) the good die young. 
D) total utility is greater than marginal utility. 
E) the standard of living is higher in North America than in South America. 
A) bad things happen to good people. 
B) the price of water is low and the price of a diamond is high, but water is essential to life while diamonds are not. 
C) the good die young. 
D) total utility is greater than marginal utility. 
E) the standard of living is higher in North America than in South America.

Question 2

As more of a good is consumed its

Accepted Answer

A) marginal utility increases. 
B) marginal utility decreases. 
C) marginal utility remains unchanged. 
D) total utility decreases. 
E) total utility increases at an increasing rate. 
A) marginal utility increases. 
B) marginal utility decreases. 
C) marginal utility remains unchanged. 
D) total utility decreases. 
E) total utility increases at an increasing rate.

Question 3

Bounded self-interest

Accepted Answer

A) is limited by the computing power of the human brain. 
B) prevents us from making a decision that we know, at the time of implementing the decision, we will later regret. 
C) is the tendency for people to value something more highly simply because they own it. 
D) results in sometimes suppressing our own interests to help others. 
E) is the tendency for people to value something more highly simply because a friend owns it. 
A) is limited by the computing power of the human brain. 
B) prevents us from making a decision that we know, at the time of implementing the decision, we will later regret. 
C) is the tendency for people to value something more highly simply because they own it. 
D) results in sometimes suppressing our own interests to help others. 
E) is the tendency for people to value something more highly simply because a friend owns it.

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.
  
-Consider Devon's total utility from snorkeling and windsurfing in Table 8.2.1.Suppose that Devon's total income rises from $35 to $55,ceteris paribus.Given that Devon changes his choice of windsurfing and snorkeling,what is his income elasticity for windsurfing?

Accepted Answer

A) zero 
B) 28.6 
C) 44.4 
D) 0.64 
E) 1.55 
A) zero 
B) 28.6 
C) 44.4 
D) 0.64 
E) 1.55

Question 5

Use the table below to answer the following questions.
Table 8.2.1
  
-Refer to Table 8.2.1.Consider Sam's utility from sailing and skiing.If the price of sailing is $10 per hour and the price of skiing is $20 per hour,Sam will choose to spend

Accepted Answer

A) all his time sailing. 
B) all his time skiing. 
C) more time sailing than skiing. 
D) more time skiing than sailing. 
E) the same amount of time sailing and skiing, since they give the same amount of utility. 
A) all his time sailing. 
B) all his time skiing. 
C) more time sailing than skiing. 
D) more time skiing than sailing. 
E) the same amount of time sailing and skiing, since they give the same amount of utility.

Question 6

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility of

Accepted Answer

A) oranges decreases. 
B) apples decreases. 
C) pears decreases. 
D) oranges remains constant. 
E) oranges, apples, and pears all decrease. 
A) oranges decreases. 
B) apples decreases. 
C) pears decreases. 
D) oranges remains constant. 
E) oranges, apples, and pears all decrease.

Question 7

The first can of Sprite Jack drinks give him 22 units of utility and the second can gives him an additional 12 units of utility.How much units of utility do the two cans of Sprite give Jack?

Accepted Answer

A) 17 
B) 46 
C) 34 
D) 2 
E) 36 
A) 17 
B) 46 
C) 34 
D) 2 
E) 36

Question 8

When Kathryn is at her consumer equilibrium,she is

Accepted Answer

A) consuming the combination of goods that is at the midpoint of her budget line. 
B) consuming a combination of goods that is located inside her budget line. 
C) consuming a combination of goods that is located outside her budget line. 
D) consuming a combination such that the marginal utility from good X divided by the marginal utility from good Y equals the price of good X divided by the price of good Y. 
E) on the midpoint of her demand curve. 
A) consuming the combination of goods that is at the midpoint of her budget line. 
B) consuming a combination of goods that is located inside her budget line. 
C) consuming a combination of goods that is located outside her budget line. 
D) consuming a combination such that the marginal utility from good X divided by the marginal utility from good Y equals the price of good X divided by the price of good Y. 
E) on the midpoint of her demand curve.

Question 9

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 10

As a consumer's income decreases,marginal utility theory predicts that

Accepted Answer

A) the price of normal goods falls. 
B) the demand for normal goods decreases. 
C) the demand for all goods decreases. 
D) the demand for normal goods increases. 
E) total utility increases. 
A) the price of normal goods falls. 
B) the demand for normal goods decreases. 
C) the demand for all goods decreases. 
D) the demand for normal goods increases. 
E) total utility increases.

The paradox of value asks why

As more of a good is consumed its

Bounded self-interest

Use the table below to answer the following questions. Table 8.2.1 -Refer to Table 8.2.1.Consider Sam's utility from sailing and skiing.If the price of sailing is $10 per hour and the price of skiing is $20 per hour,Sam will choose to spend

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility of

The first can of Sprite Jack drinks give him 22 units of utility and the second can gives him an additional 12 units of utility.How much units of utility do the two cans of Sprite give Jack?

When Kathryn is at her consumer equilibrium,she is

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

As a consumer's income decreases,marginal utility theory predicts that

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

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 8: Utility and Demand

The paradox of value asks why

As more of a good is consumed its

Bounded self-interest

Use the table below to answer the following questions. Table 8.2.1 -Refer to Table 8.2.1.Consider Sam's utility from sailing and skiing.If the price of sailing is $10 per hour and the price of skiing is $20 per hour,Sam will choose to spend

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility of

The first can of Sprite Jack drinks give him 22 units of utility and the second can gives him an additional 12 units of utility.How much units of utility do the two cans of Sprite give Jack?

When Kathryn is at her consumer equilibrium,she is

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

As a consumer's income decreases,marginal utility theory predicts that

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

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters