Question 1

If Jack is a utility maximizer, shouldn't a fall in the price of popcorn cause an increase in his marginal utility of popcorn?

Accepted Answer

No. If the price of popcorn dr

Question 2

A person's consumption possibilities is defined by the budget line because

Accepted Answer

A)  it marks the boundary between what is affordable and unaffordable. 
B)  it represents the individual's preference for different combinations of goods. 
C)  it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources. 
D)  all consumers must consume on their budget line. 
A)  it marks the boundary between what is affordable and unaffordable. 
B)  it represents the individual's preference for different combinations of goods. 
C)  it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources. 
D)  all consumers must consume on their budget line.

Question 3

The water and diamonds paradox of value

Accepted Answer

A)  is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive. 
B)  points out that we generally have a low total utility of water and a high total utility of diamonds. 
C)  is resolved by the principle that market price is determined by total utility, not marginal utility. 
D)  none of the above 
A)  is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive. 
B)  points out that we generally have a low total utility of water and a high total utility of diamonds. 
C)  is resolved by the principle that market price is determined by total utility, not marginal utility. 
D)  none of the above

Question 4

Pizza Pepsi
  
-Elaine spends $10 a week on pizza and Pepsi. The price of pizza is $2 a slice and the price of a Pepsi is $2. The table shows Elaine's total utility from pizza and Pepsi. Elaine maximizes her total utility by buying ________ slices of pizza and ________ Pepsis a week.

Accepted Answer

A)  5; 0 
B)  0; 5 
C)  3; 2 
D)  2; 3 
A)  5; 0 
B)  0; 5 
C)  3; 2 
D)  2; 3

Question 5

The Denver Broncos is a football team in the NFL, the Colorado Crush is an arena football team, and the Highlands Ranch Falcons is a local High School team. Broncos tickets cost about $415, the Crush cost between $30 and $85 and Falcons tickets are $6. What do the prices per unit tell you about the marginal utility from each of these football games?

Accepted Answer

A)  The marginal utility will be equal from each game. 
B)  The marginal utility will be greatest from a Crush game. 
C)  The marginal utility will be greatest from a Falcons game. 
D)  The marginal utility will be greatest from a Broncos game. 
A)  The marginal utility will be equal from each game. 
B)  The marginal utility will be greatest from a Crush game. 
C)  The marginal utility will be greatest from a Falcons game. 
D)  The marginal utility will be greatest from a Broncos game.

Question 6

Marginal utility theory predicts that an increase in income means that the consumption of

Accepted Answer

A)  all goods will increase. 
B)  normal goods will increase and consumption of inferior goods will decrease. 
C)  inferior goods will increase and consumption of normal goods will decrease. 
D)  None of the above answers is correct. 
A)  all goods will increase. 
B)  normal goods will increase and consumption of inferior goods will decrease. 
C)  inferior goods will increase and consumption of normal goods will decrease. 
D)  None of the above answers is correct.

Question 7

We can explain the paradox of value as follows: The consumer surplus from water, which is cheap, is ________ than the consumer surplus from gold, which is expensive; the total utility from gold is ________ than the total utility from water; and the marginal utility per dollar spent on water ________ the marginal utility per dollar spent on gold.

Accepted Answer

A)  greater; less; equals 
B)  smaller; less; equals 
C)  greater; greater; greater than 
D)  less; greater; greater than 
A)  greater; less; equals 
B)  smaller; less; equals 
C)  greater; greater; greater than 
D)  less; greater; greater than

Question 8

As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility

Accepted Answer

A)  increases at a constant rate. 
B)  increases at a decreasing rate. 
C)  increases at an increasing rate. 
D)  decreases. 
A)  increases at a constant rate. 
B)  increases at a decreasing rate. 
C)  increases at an increasing rate. 
D)  decreases.

Question 9

The paradox of value refers to the fact that

Accepted Answer

A)  different consumers value the same items differently. 
B)  the value of a good depends on its total utility. 
C)  water costs little, while diamonds cost a lot. 
D)  water brings little consumer surplus. 
A)  different consumers value the same items differently. 
B)  the value of a good depends on its total utility. 
C)  water costs little, while diamonds cost a lot. 
D)  water brings little consumer surplus.

Question 10

Andy spends $30 a week on movies and magazines. The price of a movie is $8, the price of a magazine is $2, and Andy sees 3 movies a week and buys 3 magazines. The price of a magazine increases to $4 and Andy's brother gives him $6 a week so that he can still see 3 movies a week and buy 3 magazines. In this situation, Andy will see ________ movies a week and buy ________ magazines.

Accepted Answer

A)  fewer than 3; fewer than 3 
B)  3; 3 
C)  fewer than 3; more than 3 
D)  more than 3; fewer than 3 
A)  fewer than 3; fewer than 3 
B)  3; 3 
C)  fewer than 3; more than 3 
D)  more than 3; fewer than 3

Question 11

The paradox of value between diamonds and water is explained by the fact that the

Accepted Answer

A)  total utility of diamonds exceeds the total utility of water. 
B)  marginal utility of diamonds exceeds the marginal utility of water. 
C)  total utility of diamonds exceeds the marginal utility of water. 
D)  marginal utility of diamonds exceeds the total utility of water. 
A)  total utility of diamonds exceeds the total utility of water. 
B)  marginal utility of diamonds exceeds the marginal utility of water. 
C)  total utility of diamonds exceeds the marginal utility of water. 
D)  marginal utility of diamonds exceeds the total utility of water.

Question 12

Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

Accepted Answer

A)  marginal utility from cola to the marginal utility from comics 
B)  marginal utility from comics to the marginal utility from cola 
C)  number of comics Tom buys to the number of cola Tom buys 
D)  total utility from comics to the total utility from cola 
A)  marginal utility from cola to the marginal utility from comics 
B)  marginal utility from comics to the marginal utility from cola 
C)  number of comics Tom buys to the number of cola Tom buys 
D)  total utility from comics to the total utility from cola

Question 13

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. 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)  5 slices of pizza and no Diet Pepsi 
B)  4 slices of pizza and 2 Diet Pepsis 
C)  3 slices of pizza and 4 Diet Pepsis 
D)  2 slice of pizza and 6 Diet Pepsis 
A)  5 slices of pizza and no Diet Pepsi 
B)  4 slices of pizza and 2 Diet Pepsis 
C)  3 slices of pizza and 4 Diet Pepsis 
D)  2 slice of pizza and 6 Diet Pepsis

Question 14

Suppose that Arnold spends all his income on bratwursts and piano lessons and his marginal utility per dollar on bratwursts is lower than that on piano lessons. Is Arnold maximizing his utility? Why or why not?

Accepted Answer

No. If Arnold spends a dollar less on br

Question 15

-John either buys a steak or chicken when dining out. John's marginal utility for steak and chicken is given in the above table. If the price of a steak is $10 and the price of a chicken is $10 and John has $50 to spend on the two goods, what combination of steak and chicken will John consume to maximize his utility?

Accepted Answer

A)  1 steak and 4 chickens 
B)  3 steaks and 2 chickens 
C)  4 steaks and 3 chickens 
D)  5 steaks and 6 chickens 
A)  1 steak and 4 chickens 
B)  3 steaks and 2 chickens 
C)  4 steaks and 3 chickens 
D)  5 steaks and 6 chickens

Question 16

A measure of all the satisfaction you receive from all the coffee that you consume is your

Accepted Answer

A)  marginal utility of coffee. 
B)  marginal utility per dollar spent on coffee. 
C)  total utility from coffee. 
D)  marginal utility per dollar spent on coffee when you are in your consumer equilibrium. 
A)  marginal utility of coffee. 
B)  marginal utility per dollar spent on coffee. 
C)  total utility from coffee. 
D)  marginal utility per dollar spent on coffee when you are in your consumer equilibrium.

Question 17

-Amy has the total utility values given above for DVD rentals a week. Complete the table by calculating her marginal utilities.

Accepted Answer

@#IMG-DLM& The compl

Question 18

Sub sandwiches Mountain Dew
  
-The above table gives Sue's marginal utility schedules for sub sandwiches and Mountain Dew, the only products Sue consumes. Suppose initially the price of a sub sandwich is $4 each and the price of a Mountain Dew is $2 each. Sue's income is $12. If the price of subs rises to $6 each, Sue will consume

Accepted Answer

A)  more Mountain Dews. 
B)  fewer subs. 
C)  fewer Mountain Dews so that she can still afford to buy two subs. 
D)  Both answers A and B are correct. 
A)  more Mountain Dews. 
B)  fewer subs. 
C)  fewer Mountain Dews so that she can still afford to buy two subs. 
D)  Both answers A and B are correct.

Question 19

Keesha consumes only milkshakes and burgers. Once at her consumer equilibrium, what would happen if she changed her consumption by purchasing one more milkshake and one fewer burger?

Accepted Answer

A)  The marginal utility of a burger would decrease. 
B)  The marginal utility of a milkshake would increase. 
C)  The total utility from the consumption of both goods would decrease. 
D)  all of the above 
A)  The marginal utility of a burger would decrease. 
B)  The marginal utility of a milkshake would increase. 
C)  The total utility from the consumption of both goods would decrease. 
D)  all of the above

Question 20

Bags of Popcorn Bottles of soda
  
-In the table above, if Brent maximizes his utility by consuming 3 bags of popcorn and 3 bottles of soda, then the ratio of the price of popcorn to the price of soda is expected to be

Accepted Answer

A)  1/2. 
B)  5/6. 
C)  6/5. 
D)  2. 
A)  1/2. 
B)  5/6. 
C)  6/5. 
D)  2.

If Jack is a utility maximizer, shouldn't a fall in the price of popcorn cause an increase in his marginal utility of popcorn?

A person's consumption possibilities is defined by the budget line because

The water and diamonds paradox of value

Pizza Pepsi -Elaine spends $10 a week on pizza and Pepsi. The price of pizza is $2 a slice and the price of a Pepsi is $2. The table shows Elaine's total utility from pizza and Pepsi. Elaine maximizes her total utility by buying slices of pizza and Pepsis a week.

Marginal utility theory predicts that an increase in income means that the consumption of

As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility

The paradox of value refers to the fact that

The paradox of value between diamonds and water is explained by the fact that the

Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. 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?

Suppose that Arnold spends all his income on bratwursts and piano lessons and his marginal utility per dollar on bratwursts is lower than that on piano lessons. Is Arnold maximizing his utility? Why or why not?

A measure of all the satisfaction you receive from all the coffee that you consume is your

-Amy has the total utility values given above for DVD rentals a week. Complete the table by calculating her marginal utilities.

Keesha consumes only milkshakes and burgers. Once at her consumer equilibrium, what would happen if she changed her consumption by purchasing one more milkshake and one fewer burger?

Bags of Popcorn Bottles of soda -In the table above, if Brent maximizes his utility by consuming 3 bags of popcorn and 3 bottles of soda, then the ratio of the price of popcorn to the price of soda is expected to be

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

Exam 8: Utility and Demand

If Jack is a utility maximizer, shouldn't a fall in the price of popcorn cause an increase in his marginal utility of popcorn?

A person's consumption possibilities is defined by the budget line because

The water and diamonds paradox of value

Pizza Pepsi -Elaine spends $10 a week on pizza and Pepsi. The price of pizza is $2 a slice and the price of a Pepsi is $2. The table shows Elaine's total utility from pizza and Pepsi. Elaine maximizes her total utility by buying ________ slices of pizza and ________ Pepsis a week.

Marginal utility theory predicts that an increase in income means that the consumption of

As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility

The paradox of value refers to the fact that

The paradox of value between diamonds and water is explained by the fact that the

Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. 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?

Suppose that Arnold spends all his income on bratwursts and piano lessons and his marginal utility per dollar on bratwursts is lower than that on piano lessons. Is Arnold maximizing his utility? Why or why not?

A measure of all the satisfaction you receive from all the coffee that you consume is your

-Amy has the total utility values given above for DVD rentals a week. Complete the table by calculating her marginal utilities.

Keesha consumes only milkshakes and burgers. Once at her consumer equilibrium, what would happen if she changed her consumption by purchasing one more milkshake and one fewer burger?

Bags of Popcorn Bottles of soda -In the table above, if Brent maximizes his utility by consuming 3 bags of popcorn and 3 bottles of soda, then the ratio of the price of popcorn to the price of soda is expected to be

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

Pizza Pepsi -Elaine spends $10 a week on pizza and Pepsi. The price of pizza is $2 a slice and the price of a Pepsi is $2. The table shows Elaine's total utility from pizza and Pepsi. Elaine maximizes her total utility by buying slices of pizza and Pepsis a week.