Question 1

Tom's marginal utility from a Sobe exceeds his marginal utility of crackers. Therefore, his total utility of Sobe must exceed his total utility of crackers.

Accepted Answer

A) True 
 B)False

Question 2

Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is ________ for ________ goods.

Accepted Answer

A)  as small as possible; all 
B)  equal; all 
C)  equal; normal 
D)  maximized; all 
A)  as small as possible; all 
B)  equal; all 
C)  equal; normal 
D)  maximized; all

Question 3

The principle of diminishing marginal utility can be used to explain why

Accepted Answer

A)  Bob's second soda is less enjoyable than his first soda. 
B)  Bob's first soda is less enjoyable than his second soda. 
C)  Charlie enjoys his fourth soda less than Bob enjoys his first. 
D)  Bob enjoys his first soda more than Charlie enjoys his fourth. 
A)  Bob's second soda is less enjoyable than his first soda. 
B)  Bob's first soda is less enjoyable than his second soda. 
C)  Charlie enjoys his fourth soda less than Bob enjoys his first. 
D)  Bob enjoys his first soda more than Charlie enjoys his fourth.

Question 4

Pizza Pepsi
  
-The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. Initially, a slice of pizza costs $4 and a can of Pepsi $2. Suppose Priscilla has $12 to spend. If the price of pizza falls to $2, Priscilla will choose to

Accepted Answer

A)  consume more pizza. 
B)  consume more Pepsi. 
C)  consume less pizza. 
D)  Both answers A and B are correct. 
A)  consume more pizza. 
B)  consume more Pepsi. 
C)  consume less pizza. 
D)  Both answers A and B are correct.

Question 5

Marginal utility theory predicts that

Accepted Answer

A)  when the price of a good rises, the quantity demanded of that good decreases. 
B)  if the price of one good rises, the demand for a substitute good increases. 
C)  if income increases, the demand for a normal good increases. 
D)  All of the above answers are correct because all are predictions of marginal utility theory. 
A)  when the price of a good rises, the quantity demanded of that good decreases. 
B)  if the price of one good rises, the demand for a substitute good increases. 
C)  if income increases, the demand for a normal good increases. 
D)  All of the above answers are correct because all are predictions of marginal utility theory.

Question 6

Chips Sodas
  
-The table above shows Mary's utility from chips and soda. Mary receives ________ units of utility from the third chip.

Accepted Answer

A)  30 
B)  20 
C)  55 
D)  40 
A)  30 
B)  20 
C)  55 
D)  40

Question 7

The only goods you consume are pizza and soda. Both are normal goods. You consider pizza and soda to be substitutes. Which of the following will lead you to eat more pizza?

Accepted Answer

A)  The price of a pizza falls. 
B)  The price of a soda falls. 
C)  The price of a soda rises. 
D)  Both answers A and C are correct. 
A)  The price of a pizza falls. 
B)  The price of a soda falls. 
C)  The price of a soda rises. 
D)  Both answers A and C are correct.

Question 8

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the third pound of cookies is

Accepted Answer

A)  3. 
B)  4. 
C)  9. 
D)  12. 
A)  3. 
B)  4. 
C)  9. 
D)  12.

Question 9

For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer.

Accepted Answer

Yes, the consumer is maximizin

Question 10

Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a sub sandwiches increases

Accepted Answer

A)  Sue will move upward along her demand curve for subs. 
B)  Sue will move downward along her demand curve for subs. 
C)  Sue's demand curve for subs will shift leftward. 
D)  Sue's demand curve for subs will shift rightward. 
A)  Sue will move upward along her demand curve for subs. 
B)  Sue will move downward along her demand curve for subs. 
C)  Sue's demand curve for subs will shift leftward. 
D)  Sue's demand curve for subs will shift rightward.

Question 11

Diminishing marginal utility means that

Accepted Answer

A)  Ralph will enjoy his second hamburger less than the first. 
B)  the total utility from one hamburger exceeds the total utility from two hamburgers. 
C)  the price of two hamburgers is twice the price of one. 
D)  beyond a certain point, total utility decreases as income rises. 
A)  Ralph will enjoy his second hamburger less than the first. 
B)  the total utility from one hamburger exceeds the total utility from two hamburgers. 
C)  the price of two hamburgers is twice the price of one. 
D)  beyond a certain point, total utility decreases as income rises.

Question 12

Jennifer consumes both apples and bread. Let Pa be the price of an apple and Pb the price of a loaf of bread. TUa is her total utility from apples and TUb is her total utility from bread. MUa is her marginal utility from apples and MUb is her marginal utility from bread. When Jennifer is in consumer equilibrium

Accepted Answer

A)  MUa/TUa = MUb/TUb. 
B)  MUa/Pb = MUb/Pa. 
C)  MUa/Pa = MUb/Pb. 
D)  TUa/Pb = TUb/Pb. 
A)  MUa/TUa = MUb/TUb. 
B)  MUa/Pb = MUb/Pa. 
C)  MUa/Pa = MUb/Pb. 
D)  TUa/Pb = TUb/Pb.

Question 13

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 $.50 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  five 
B)  six 
C)  seven 
D)  eight 
A)  five 
B)  six 
C)  seven 
D)  eight

Question 14

The tendency of people to value something more highly when they own it is called the

Accepted Answer

A)  wealth effect. 
B)  endowment effect. 
C)  path dependent effect. 
D)  endorsement effect. 
A)  wealth effect. 
B)  endowment effect. 
C)  path dependent effect. 
D)  endorsement effect.

Question 15

Does Mr. McConaughey's marginal utility from spending time with family and friends and from breaking a sweat obey the principle of diminishing marginal utility?

Accepted Answer

A)  No, neither obeys the principle of diminishing marginal utility. 
B)  Only breaking a sweat obeys the principle of diminishing marginal utility. 
C)  Yes, they both obey the principle of diminishing marginal utility. 
D)  Only spending time with friends and family obeys the principle of diminishing marginal utility. 
A)  No, neither obeys the principle of diminishing marginal utility. 
B)  Only breaking a sweat obeys the principle of diminishing marginal utility. 
C)  Yes, they both obey the principle of diminishing marginal utility. 
D)  Only spending time with friends and family obeys the principle of diminishing marginal utility.

Question 16

Milkshakes Sodas
  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  one 
B)  two 
C)  three 
D)  four 
A)  one 
B)  two 
C)  three 
D)  four

Question 17

Total utility describes

Accepted Answer

A)  the benefit gained from all consumption. 
B)  an increase in consumption multiplied by the gain in utility. 
C)  total consumption multiplied by marginal utility. 
D)  total consumption divided by marginal utility. 
A)  the benefit gained from all consumption. 
B)  an increase in consumption multiplied by the gain in utility. 
C)  total consumption multiplied by marginal utility. 
D)  total consumption divided by marginal utility.

Question 18

What are the two conditions that are met if a consumer is maximizing utility?

Accepted Answer

There are two conditions: (1)

Question 19

Marginal utility diminishes as consumption of a good decreases.

Accepted Answer

A) True 
 B)False

Question 20

The marginal utility from the consumption of a good is equal to the

Accepted Answer

A)  total utility divided by the quantity consumed. 
B)  total utility divided by the price. 
C)  change in total utility divided by the change in the quantity consumed. 
D)  change in total utility divided by the change in price. 
A)  total utility divided by the quantity consumed. 
B)  total utility divided by the price. 
C)  change in total utility divided by the change in the quantity consumed. 
D)  change in total utility divided by the change in price.

Tom's marginal utility from a Sobe exceeds his marginal utility of crackers. Therefore, his total utility of Sobe must exceed his total utility of crackers.

Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is for goods.

The principle of diminishing marginal utility can be used to explain why

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. Initially, a slice of pizza costs $4 and a can of Pepsi $2. Suppose Priscilla has $12 to spend. If the price of pizza falls to $2, Priscilla will choose to

Marginal utility theory predicts that

Chips Sodas -The table above shows Mary's utility from chips and soda. Mary receives ________ units of utility from the third chip.

The only goods you consume are pizza and soda. Both are normal goods. You consider pizza and soda to be substitutes. Which of the following will lead you to eat more pizza?

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the third pound of cookies is

For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer.

Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a sub sandwiches increases

Diminishing marginal utility means that

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 $.50 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

The tendency of people to value something more highly when they own it is called the

Does Mr. McConaughey's marginal utility from spending time with family and friends and from breaking a sweat obey the principle of diminishing marginal utility?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

Total utility describes

What are the two conditions that are met if a consumer is maximizing utility?

Marginal utility diminishes as consumption of a good decreases.

The marginal utility from the consumption of a good is equal to the

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

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Exam 8: Utility and Demand

Tom's marginal utility from a Sobe exceeds his marginal utility of crackers. Therefore, his total utility of Sobe must exceed his total utility of crackers.

Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is ________ for ________ goods.

The principle of diminishing marginal utility can be used to explain why

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. Initially, a slice of pizza costs $4 and a can of Pepsi $2. Suppose Priscilla has $12 to spend. If the price of pizza falls to $2, Priscilla will choose to

Marginal utility theory predicts that

Chips Sodas -The table above shows Mary's utility from chips and soda. Mary receives ________ units of utility from the third chip.

The only goods you consume are pizza and soda. Both are normal goods. You consider pizza and soda to be substitutes. Which of the following will lead you to eat more pizza?

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the third pound of cookies is

For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer.

Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a sub sandwiches increases

Diminishing marginal utility means that

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 $.50 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

The tendency of people to value something more highly when they own it is called the

Does Mr. McConaughey's marginal utility from spending time with family and friends and from breaking a sweat obey the principle of diminishing marginal utility?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

Total utility describes

What are the two conditions that are met if a consumer is maximizing utility?

Marginal utility diminishes as consumption of a good decreases.

The marginal utility from the consumption of a good is equal to the

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

Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is for goods.