Exam 8: Utility and Demand

-Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for pizza and marginal utility for DVDs. If the price of a pizza is $10, the price of a DVD is $5, and Lisa has $40 to spend on the two goods, what combination of pizza and DVDs will maximize her utility?

Marginal utility theory predicts that a rise in the price of a banana results in

George spends all his income on sandwiches and juice. George's utility is maximized when he is consuming sandwiches and juice so that the

Is "utility" another word for the cost we give up when we consume a good?

Which of the following occur when a person maximizes utility? I. The marginal utility of each good bought is equal. II) The highest level of utility is attained. III) All of a person's budget is spent.

When you chose to buy the second cup of coffee instead of the third bagel, which of the following is necessarily CORRECT?

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. A slice of pizza costs $4 and a can of Pepsi $2. Suppose Priscilla has $12 to spend. Which of the following leads Priscilla to switch her choices of pizza and Pepsi?

Explain why total utility is maximized when the marginal utility per dollar on all goods is equal.

"Because the price of a diamond is much greater than the price of a gallon of water, the consumer surplus from diamonds is greater than the consumer surplus from water." Is the previous analysis CORRECT? Explain your answer.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What is Tom's total utility at his consumer equilibrium?

The total utility you get from eating slices of pizza on a given night is the

Which of the following is consistent with the assumptions of marginal utility theory?

Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound and bananas cost $1 per pound. The marginal utility is 30 for the last pound of mangos purchased and 10 for the last pound of bananas. To maximize his utility, Robinson should buy

You are studying with a friend, and your friend says "To maximize utility, a consumer must consume the combination of goods so that the marginal utility of good X equals the marginal utility of good Y." Explain whether your friend's statement is correct or incorrect.

Bags of Popcorn Bottles of soda -Jenny buys sodas and popcorn. Sodas sell for $1 and popcorn sells for $2 a bag. Currently she is in consumer equilibrium, with the marginal utility from her last dollar spent on popcorn equal to 100 units of utility. The marginal utility from her last dollar spent on sodas is

Which statement is TRUE about Mr. McConaughey's marginal utility from spending time with family and friends and breaking a sweat?

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 is consuming 1 slice of pizza and 2 cans of Pepsi, which of the following is CORRECT?

-The table above gives Jessie's marginal utility and total utility from tacos. Complete the table.

Joshua consumes only apples and bread and is in consumer equilibrium. Joshua reads that eating bread is healthy, so his total utility from each loaf of bread increases. At his new consumer equilibrium Joshua would consume

Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________.