Exam 8: Utility and Demand

Pizza CDs -Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Bobby currently buys 2 pizzas and 6 CDs. To maximize his utility in the next period, he should

Ricardo buys cola and popcorn. Cola sells for $0.50 a can and popcorn sells for $1 per bag. He is in consumer equilibrium. The price of a cola jumps to $1 per can. In his new consumer equilibrium, Ricardo's

The measure of the benefit you get from consuming the next cup of coffee is your

Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her total utility from movies will ________ and her total utility from books will ________.

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

-The table above gives the utility from pens and pencils. The marginal utility derived from the third pen is

Total utility is maximized when the ________ for all goods.

Sarah consumes pizzas and hamburgers. The price of a hamburger is $1 and the marginal utility from her last hamburger is 5. Let P_p be the price of a pizza and MU_p be the marginal utility of pizzas. In consumer equilibrium, the ratio MU_p/P_p for Sarah's last pizza must equal

Suppose that Alyssa spends all her income on video games and DVDs and her marginal utility per dollar from video games equals that from DVDs. Is Alyssa maximizing her utility? Now, suppose that the price of a DVD falls. Should Alyssa change the combination of goods she consumes? If yes, how? Explain.

-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10 and Jane's budget is $88. What is Jane's marginal utility per dollar spent on magazines at her consumer equilibrium?

-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the marginal utility per dollar spent on water and on hamburgers when the consumer is in consumer equilibrium?

Marginal utility is the

Tom's marginal utility of Mountain Dew exceeds his marginal utility of crackers at his consumer equilibrium. Therefore, his consumer surplus from Mountain Dew must exceed his consumer surplus from crackers.

Magazines Chocolate bars -Sonya's budget for magazines and chocolate bars is $50. Her marginal utility from these goods is shown in the table above. The price of a magazine is $5 and the price of a chocolate bar is $2.50. Sonya currently buys 3 magazines and 14 chocolate bars. To maximize her utility, she should

Michael consumes only steak and lobster. Suppose that the price of steak rises. After Michael is back at equilibrium, compared to the situation when steak was cheaper, the marginal utility from the last steak will

A behavioral economist will explain Tom's donation to charity by saying that Tom is displaying

If it costs $6.00 to go to the movies and $25.00 to go to a hockey game, Tom is maximizing his utility between movies and hockey if his marginal utility of movies is 12 units and his marginal utility from hockey is 50.

Katie finds that the marginal utility from a compact disc is 30 and the marginal utility from a pizza is 10. The price of a compact disc is $15 and the price of a pizza is $10. In order to increase her utility, Katie should

Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys

Ice cream Romance novels -Ricardo likes to rent DVDs and attend concerts. The DVDs cost $4 and the concerts cost $40. Ricardo's marginal utility from the last DVD is 20 units. Ricardo is maximizing his utility. What is his marginal utility from the last concert he attended?