Question 1

-Julie's total utility from cheeseburgers is given in the table above. What is the marginal utility of the third cheeseburger?

Accepted Answer

A)  86 
B)  28.7 
C)  20 
D)  14 
A)  86 
B)  28.7 
C)  20 
D)  14

Question 2

As consumption increases, total utility increases

Accepted Answer

A)  at an increasing rate. 
B)  at a decreasing rate. 
C)  at a constant rate. 
D)  and marginal utility increases. 
A)  at an increasing rate. 
B)  at a decreasing rate. 
C)  at a constant rate. 
D)  and marginal utility increases.

Question 3

If the price of a good increases, all else the same, then the consumer's total utility will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same as consumption shifts to cheaper goods. 
D)  decrease if there are no substitutes for the good and remain the same if there are substitutes for the good. 
A)  increase. 
B)  decrease. 
C)  remain the same as consumption shifts to cheaper goods. 
D)  decrease if there are no substitutes for the good and remain the same if there are substitutes for the good.

Question 4

Rembrandt paintings are expensive and not as vital for life as milk, which is cheap. Marginal utility theory explains this paradox of value: The total utility from a Rembrandt painting is ________ than the total utility from milk, and the marginal utility from a Rembrandt painting is ________ than the marginal utility from milk.

Accepted Answer

A)  smaller; smaller 
B)  smaller; larger 
C)  larger; smaller 
D)  larger; larger 
A)  smaller; smaller 
B)  smaller; larger 
C)  larger; smaller 
D)  larger; larger

Question 5

Your marginal utility from a hamburger

Accepted Answer

A)  is always greater than your total utility from hamburgers. 
B)  is always greater than your average utility from a hamburger. 
C)  is always greater than the price of a hamburger. 
D)  depends on how many hamburgers you've already eaten. 
A)  is always greater than your total utility from hamburgers. 
B)  is always greater than your average utility from a hamburger. 
C)  is always greater than the price of a hamburger. 
D)  depends on how many hamburgers you've already eaten.

Question 6

Which of the following is NOT an assumption of marginal utility theory?

Accepted Answer

A)  A consumer derives utility from the goods consumed. 
B)  Each additional unit of consumption yields additional utility. 
C)  Consumers maximize their total utility. 
D)  As more of a good is consumed, the decrease in the marginal utility from the good means that the total utility from the good decreases also. 
A)  A consumer derives utility from the goods consumed. 
B)  Each additional unit of consumption yields additional utility. 
C)  Consumers maximize their total utility. 
D)  As more of a good is consumed, the decrease in the marginal utility from the good means that the total utility from the good decreases also.

Question 7

As more of a good is consumed, its marginal utility ________ and its total utility ________.

Accepted Answer

A)  rises; rises 
B)  rises; falls 
C)  falls; rises 
D)  falls; falls 
A)  rises; rises 
B)  rises; falls 
C)  falls; rises 
D)  falls; falls

Question 8

The principle of diminishing marginal utility implies that the

Accepted Answer

A)  marginal utility of a product is negative. 
B)  total utility from a product is also diminishing as more units are consumed. 
C)  rate of change of total utility is diminishing as more units are consumed. 
D)  rate of change of marginal utility is very low as more units are consumed. 
A)  marginal utility of a product is negative. 
B)  total utility from a product is also diminishing as more units are consumed. 
C)  rate of change of total utility is diminishing as more units are consumed. 
D)  rate of change of marginal utility is very low as more units are consumed.

Question 9

Chips Sodas
  
-The table above shows Mary's utility from chips and soda. The table shows that

Accepted Answer

A)  Mary prefers sodas to chips. 
B)  Mary will consume no soda and only chips. 
C)  Mary's marginal utility decreases as she consumes more chips. 
D)  Mary's total utility decreases as she consumes more chips. 
A)  Mary prefers sodas to chips. 
B)  Mary will consume no soda and only chips. 
C)  Mary's marginal utility decreases as she consumes more chips. 
D)  Mary's total utility decreases as she consumes more chips.

Question 10

The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will ________ and your marginal utility from each additional slice of pizza will ________.

Accepted Answer

A)  increase; decrease 
B)  decrease; increase 
C)  increase; increase 
D)  decrease; decrease 
A)  increase; decrease 
B)  decrease; increase 
C)  increase; increase 
D)  decrease; decrease

Question 11

Marginal utility theory predicts that when the price of one good rises, the demand for another good is a substitute increases. This change occurs because of

Accepted Answer

A)  an increase in the marginal utility per dollar from the substitute good. 
B)  an increase in the marginal utility of the substitute good. 
C)  a decrease in the marginal utility per dollar from the good whose price has risen. 
D)  a decrease in the marginal utility of the good whose price has risen. 
A)  an increase in the marginal utility per dollar from the substitute good. 
B)  an increase in the marginal utility of the substitute good. 
C)  a decrease in the marginal utility per dollar from the good whose price has risen. 
D)  a decrease in the marginal utility of the good whose price has risen.

Question 12

-As shown in the above table, Sam enjoys sailing and skiing equally well. Which of the following is TRUE?

Accepted Answer

A)  Sam will not consume the same number of hours of sailing and skiing if the price per hour of sailing is more than that of skiing. 
B)  If the prices per hour of sailing and skiing are the same, Sam will not spend the same number of hours at each activity. 
C)  The marginal utility of the 3rd hour of either sailing or skiing is 120. 
D)  None of the above is true. 
A)  Sam will not consume the same number of hours of sailing and skiing if the price per hour of sailing is more than that of skiing. 
B)  If the prices per hour of sailing and skiing are the same, Sam will not spend the same number of hours at each activity. 
C)  The marginal utility of the 3rd hour of either sailing or skiing is 120. 
D)  None of the above is true.

Question 13

-The above table shows Tammy's total utility from streaming videos and CDs. If Tammy has $70 to spend on videos and CDs and if the price of a streamed video is $10 and the price of a CD is $20, then Tammy maximizes her utility by purchasing

Accepted Answer

A)  3 CDs and 1 video. 
B)  1 CD and 5 videos. 
C)  2 CDs and 3 videos. 
D)  none of the above. 
A)  3 CDs and 1 video. 
B)  1 CD and 5 videos. 
C)  2 CDs and 3 videos. 
D)  none of the above.

Question 14

According to the paradox of value, expensive goods, such as gemstones, provide consumers with

Accepted Answer

A)  high total utility and low marginal utility. 
B)  low total utility and low marginal utility. 
C)  low total utility and high marginal utility. 
D)  high marginal utility and high total utility. 
A)  high total utility and low marginal utility. 
B)  low total utility and low marginal utility. 
C)  low total utility and high marginal utility. 
D)  high marginal utility and high total utility.

Question 15

Pizza Pepsi
  
-The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza

Accepted Answer

A)  she is maximizing her total utility. 
B)  she is not equating marginal utility per dollar for pizza and Pepsi. 
C)  she is not at a consumer equilibrium. 
D)  Both answers B and C are correct. 
A)  she is maximizing her total utility. 
B)  she is not equating marginal utility per dollar for pizza and Pepsi. 
C)  she is not at a consumer equilibrium. 
D)  Both answers B and C are correct.

Question 16

Marginal utility is the

Accepted Answer

A)  total satisfaction that a person gets from the consumption of all of the units of a good consumed. 
B)  change in satisfaction that results from a one-unit increase in the quantity of a good consumed. 
C)  maximum price that a consumer is willing to pay for an additional unit of a good. 
D)  additional cost to a consumer when an additional unit of a good is consumed. 
A)  total satisfaction that a person gets from the consumption of all of the units of a good consumed. 
B)  change in satisfaction that results from a one-unit increase in the quantity of a good consumed. 
C)  maximum price that a consumer is willing to pay for an additional unit of a good. 
D)  additional cost to a consumer when an additional unit of a good is consumed.

Question 17

If a consumer is consuming a combination of goods and services on his budget line, has the consumer allocated his or her entire budget?

Accepted Answer

Yes, the consumer has allocate

Question 18

Fritos Fruit drinks
  
-The table above shows the total utility from the two goods Freddy likes to consume. If Freddy has consumed 4 fruit drinks and then decides to drink another

Accepted Answer

A)  his total utility will increase. 
B)  the marginal utility from the 5th drink equals 30. 
C)  the marginal utility from the 5th drinks equals 50. 
D)  Both answers A and B are correct. 
A)  his total utility will increase. 
B)  the marginal utility from the 5th drink equals 30. 
C)  the marginal utility from the 5th drinks equals 50. 
D)  Both answers A and B are correct.

Question 19

Liane maximizes her total utility when she allocates all of her available income such that the marginal utility per dollar spent on each good

Accepted Answer

A)  is diminishing. 
B)  is maximized. 
C)  is the same. 
D)  is increasing. 
A)  is diminishing. 
B)  is maximized. 
C)  is the same. 
D)  is increasing.

Question 20

-Betsy's utility depending from her consumption of coffee is shown in the table above. Betsy's marginal utility from the 3rd cup of coffee per day is

Accepted Answer

A)  30. 
B)  85. 
C)  90. 
D)  10. 
A)  30. 
B)  85. 
C)  90. 
D)  10.

-Julie's total utility from cheeseburgers is given in the table above. What is the marginal utility of the third cheeseburger?

As consumption increases, total utility increases

If the price of a good increases, all else the same, then the consumer's total utility will

Your marginal utility from a hamburger

Which of the following is NOT an assumption of marginal utility theory?

As more of a good is consumed, its marginal utility and its total utility .

The principle of diminishing marginal utility implies that the

Chips Sodas -The table above shows Mary's utility from chips and soda. The table shows that

The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will and your marginal utility from each additional slice of pizza will .

Marginal utility theory predicts that when the price of one good rises, the demand for another good is a substitute increases. This change occurs because of

-As shown in the above table, Sam enjoys sailing and skiing equally well. Which of the following is TRUE?

-The above table shows Tammy's total utility from streaming videos and CDs. If Tammy has $70 to spend on videos and CDs and if the price of a streamed video is $10 and the price of a CD is $20, then Tammy maximizes her utility by purchasing

According to the paradox of value, expensive goods, such as gemstones, provide consumers with

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza

Marginal utility is the

If a consumer is consuming a combination of goods and services on his budget line, has the consumer allocated his or her entire budget?

Fritos Fruit drinks -The table above shows the total utility from the two goods Freddy likes to consume. If Freddy has consumed 4 fruit drinks and then decides to drink another

Liane maximizes her total utility when she allocates all of her available income such that the marginal utility per dollar spent on each good

-Betsy's utility depending from her consumption of coffee is shown in the table above. Betsy's marginal utility from the 3rd cup of coffee per day is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

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Exam 8: Utility and Demand

-Julie's total utility from cheeseburgers is given in the table above. What is the marginal utility of the third cheeseburger?

As consumption increases, total utility increases

If the price of a good increases, all else the same, then the consumer's total utility will

Your marginal utility from a hamburger

Which of the following is NOT an assumption of marginal utility theory?

As more of a good is consumed, its marginal utility ________ and its total utility ________.

The principle of diminishing marginal utility implies that the

Chips Sodas -The table above shows Mary's utility from chips and soda. The table shows that

The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will ________ and your marginal utility from each additional slice of pizza will ________.

Marginal utility theory predicts that when the price of one good rises, the demand for another good is a substitute increases. This change occurs because of

-As shown in the above table, Sam enjoys sailing and skiing equally well. Which of the following is TRUE?

-The above table shows Tammy's total utility from streaming videos and CDs. If Tammy has $70 to spend on videos and CDs and if the price of a streamed video is $10 and the price of a CD is $20, then Tammy maximizes her utility by purchasing

According to the paradox of value, expensive goods, such as gemstones, provide consumers with

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza

Marginal utility is the

If a consumer is consuming a combination of goods and services on his budget line, has the consumer allocated his or her entire budget?

Fritos Fruit drinks -The table above shows the total utility from the two goods Freddy likes to consume. If Freddy has consumed 4 fruit drinks and then decides to drink another

Liane maximizes her total utility when she allocates all of her available income such that the marginal utility per dollar spent on each good

-Betsy's utility depending from her consumption of coffee is shown in the table above. Betsy's marginal utility from the 3rd cup of coffee per day is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

As more of a good is consumed, its marginal utility and its total utility .

The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will and your marginal utility from each additional slice of pizza will .