Exam 8: Utility and Demand

Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound. Robinson's marginal utility is 30 for the last pound of mangos purchased and 10 for the last pound of bananas. If Robinson maximizes his utility from consuming these goods, the price of bananas is

Marginal utility theory predicts that if a consumer's income decreases, the consumer

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

-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?

As Shana's consumption of tacos decreases, her

At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts. She spends $5 a day at the shop on 3 doughnuts and 2 cups of coffee. Is Hannah maximizing her total utility?

-The above table gives some of Tammy's total and marginal utilities from comedy videos. Which of the following statements is TRUE?

Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income. His marginal utility of chocolate is 200 and his marginal utility of vanilla is 200, and the price of chocolate is $1.00 per scoop and the price of vanilla is $2.00 per scoop. To maximize his utility, Bobby should

If a consumer spends all of his or her income and the marginal utility per dollar is equal for all goods, then

As the quantity of a good consumed increases, its marginal utility ________ and its total utility ________.

-As Betsy's consumption of coffee increases, her marginal utility from coffee

Michelle spends all of her income on mangos and rice. Mangos cost $2 per pound and rice costs $1.50 per pound. If Michelle is spending all of her income and the marginal utility per dollar spent is 20 for the last pound of mangos purchased and 10 for the last pound of rice purchased, then

Janae donates $50 to the local Humane Society. This means she can't buy that new pair of shoes, which according to her utility schedule, would have maximized her utility. This example illustrates the ________ aspect of behavioral economics.

The fact that rubies are more expensive than milk reflects the fact that for most consumers

Suppose Hanna spends her entire budget buying bagels and cups of coffee each day. Also, suppose the marginal utility of her last bagel is 100 and the marginal utility of her last cup of coffee is 200. If the price of a bagel is $4 and the price of a cup of coffee is $2, then

-The table above gives the utility from pens and pencils. If the consumer has an income of $4, pens cost $1, and pencils cost $.20, what is the consumer's total utility when he or she maximizes utility?

Marginal utility theory shows us that water, which is very common, has a ________ marginal utility and a ________ total utility.

Bananas Apples -The table above gives Sam's marginal utility schedule for bananas and apples. Sam's fruit budget is $10. a) If bananas cost $1 per pound and apples cost $2 per bag, what is Sam's marginal utility per dollar for all quantities of both goods? b) What is the utility maximizing combination of bananas and apples for Sam? c) If the price of bananas increases to $2 per pound, how does Sam's marginal utility per dollar for bananas change? d) At the banana price of $2 per pound, what is the new utility maximizing combination of bananas and apples for Sam? e) List two points on Sam's demand curve for bananas.

"Water is very inexpensive. Thus the marginal and total utility of water is small." Analyze the previous statements.

The marginal utility from the first burrito Bobby consumes is larger than the marginal utility from the first taco Bobby consumes. As a result