Question 1

Discuss the decision a criminal must make before deciding whether or not to steal.

Accepted Answer

A potential criminal estimates the margi

Question 2

While eating at Alex's "Pizza by the Slice" restaurant, Kara experiences diminishing marginal utility. She gained 10 units of satisfaction from her first slice of pizza consumed and would only receive 5 units of satisfaction from consuming a second slice, at the same price. Based on this information, we can conclude that

Accepted Answer

A) Alex may have to lower the price to convince Kara to buy a second slice. 
B) Kara will not eat a second slice, even if it is given to her at no charge. 
C) Kara will definitely want to buy a second slice of pizza. 
D) even if Kara buys a second slice, she will not buy a third slice. 
A) Alex may have to lower the price to convince Kara to buy a second slice. 
B) Kara will not eat a second slice, even if it is given to her at no charge. 
C) Kara will definitely want to buy a second slice of pizza. 
D) even if Kara buys a second slice, she will not buy a third slice.

Question 3

The marginal utility of the last unit of apples consumed is 12, and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium?

Accepted Answer

A) $4 and $6 
B) $6 and $4 
C) $8 and $12 
D) $16 and $9 
A) $4 and $6 
B) $6 and $4 
C) $8 and $12 
D) $16 and $9

Question 4

Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which of the following combinations is on the consumer's budget line?

Accepted Answer

A) 4A and 9B 
B) 5A and 6B 
C) 6A and 6B 
D) 3A and 8B 
A) 4A and 9B 
B) 5A and 6B 
C) 6A and 6B 
D) 3A and 8B

Question 5

Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility)that a consumer would get from successive quantities of products J and K.   If the consumer's money income were cut from $52 to $28, and the prices of J and K remain at $8 and $4, respectively, she would maximize her satisfaction by purchasing

Accepted Answer

A) 3 units of J and 3 units of K. 
B) 1 unit of J and 3 units of K. 
C) 4 units of J and 1 unit of K. 
D) 2 units of J and 3 units of K. 
A) 3 units of J and 3 units of K. 
B) 1 unit of J and 3 units of K. 
C) 4 units of J and 1 unit of K. 
D) 2 units of J and 3 units of K.

Question 6

Explain the three characteristics of utility.

Accepted Answer

1. "Utility" and "usefulness" are not sy

Question 7

The marginal utility of the last unit of apples consumed is 10, and the marginal utility of the last unit of bananas consumed is 15. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium?

Accepted Answer

A) $3 and $2 
B) $2 and $3 
C) $15 and $10 
D) $25 and $30 
A) $3 and $2 
B) $2 and $3 
C) $15 and $10 
D) $25 and $30

Question 8

Indifference curve analysis

Accepted Answer

A) presumes, as does utility analysis, that satisfaction is numerically measurable. 
B) presumes, unlike utility analysis, that satisfaction is numerically measurable. 
C) presumes only that the consumer can say one combination of two goods yields more or less or the same amount of utility than some other combination. 
D) is in conflict with the idea of a downsloping demand curve. 
A) presumes, as does utility analysis, that satisfaction is numerically measurable. 
B) presumes, unlike utility analysis, that satisfaction is numerically measurable. 
C) presumes only that the consumer can say one combination of two goods yields more or less or the same amount of utility than some other combination. 
D) is in conflict with the idea of a downsloping demand curve.

Question 9

Many people do not steal or commit fraud because to them, the resulting feelings of guilt and uneasiness make the

Accepted Answer

A) marginal utility of the act increase. 
B) marginal utility of the act decrease. 
C) marginal cost of the act increase. 
D) marginal cost of the act decrease. 
A) marginal utility of the act increase. 
B) marginal utility of the act decrease. 
C) marginal cost of the act increase. 
D) marginal cost of the act decrease.

Question 10

Which of the following statements is correct?

Accepted Answer

A) Both cash and noncash gift-giving cause value losses. 
B) Neither cash nor noncash gift-giving causes value losses. 
C) Noncash gift-giving creates a value loss, but cash gifts do not. 
D) Cash gifts create a value loss, but noncash gifts do not. 
A) Both cash and noncash gift-giving cause value losses. 
B) Neither cash nor noncash gift-giving causes value losses. 
C) Noncash gift-giving creates a value loss, but cash gifts do not. 
D) Cash gifts create a value loss, but noncash gifts do not.

Question 11

An increase in the real income of a consumer is one result from an increase in the price of a product that the consumer is buying.

Accepted Answer

A) True 
 B)False

Question 12

A rational consumer will try to achieve the highest indifference curve that his or her income will allow.

Accepted Answer

A) True 
 B)False

Question 13

After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your choices indicate that the

Accepted Answer

A) marginal utility for four pizza slices is negative. 
B) total utility for five pizza slices is negative. 
C) marginal utility is positive for the fourth slice and negative for the fifth slice. 
D) marginal utility for the fourth slice is the largest among all slices. 
A) marginal utility for four pizza slices is negative. 
B) total utility for five pizza slices is negative. 
C) marginal utility is positive for the fourth slice and negative for the fifth slice. 
D) marginal utility for the fourth slice is the largest among all slices.

Question 14

If the prices of X and Y are $2 and $4 per unit, respectively, and this consumer has $10 in income to spend, to maximize total utility, this consumer should buy

Accepted Answer

A) 1 unit of X and 1 unit of Y. 
B) 2 units of X and 2 units of Y. 
C) 1 unit of X and 2 units of Y. 
D) 5 units of X and no units of Y. 
A) 1 unit of X and 1 unit of Y. 
B) 2 units of X and 2 units of Y. 
C) 1 unit of X and 2 units of Y. 
D) 5 units of X and no units of Y.

Question 15

Marginal utility is total utility divided by the number of units consumed.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the graphs. Pizza and beer are the only two goods Jon consumes. The price of beer is $2.00 per pitcher and pizza is $1.25 per slice. If Jon has only $10 to spend for the evening, which graph represents the set of possible combinations of beer and pizza that he can buy?

Accepted Answer

A) graph A 
B) graph B 
C) graph C 
D) graph D 
A) graph A 
B) graph B 
C) graph C 
D) graph D

Question 17

Answer the question based on the table below showing the marginal utility schedules for product X and product Y for a hypothetical consumer. The price of product X is $4, and the price of product Y is $2. The income of the consumer is $20.   If the consumer buys both product X and product Y, how much will the consumer buy of each in order to maximize utility?

Accepted Answer

A) 4X and 2Y 
B) 3X and 4Y 
C) 4X and 3Y 
D) 5X and 3Y 
A) 4X and 2Y 
B) 3X and 4Y 
C) 4X and 3Y 
D) 5X and 3Y

Question 18

Each point on a single indifference curve reflects the same level of total utility for a consumer.

Accepted Answer

A) True 
 B)False

Question 19

Give a brief description of the law of diminishing marginal utility, and use it to explain the downward slope of the demand curve.

Accepted Answer

The law of diminishing marginal utility

Question 20

The table shows the utility schedule for a consumer of candy bars.   Based on the data in the table, you can conclude that the

Accepted Answer

A) marginal utility of the fourth unit is 96. 
B) total utility of 5 units is 88. 
C) total utility of 2 units is 16. 
D) marginal utility of the sixth unit is 5. 
A) marginal utility of the fourth unit is 96. 
B) total utility of 5 units is 88. 
C) total utility of 2 units is 16. 
D) marginal utility of the sixth unit is 5.

Exam 7: Utility Maximization

Discuss the decision a criminal must make before deciding whether or not to steal.

The marginal utility of the last unit of apples consumed is 12, and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium?

Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which of the following combinations is on the consumer's budget line?

Explain the three characteristics of utility.

The marginal utility of the last unit of apples consumed is 10, and the marginal utility of the last unit of bananas consumed is 15. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium?

Indifference curve analysis

Many people do not steal or commit fraud because to them, the resulting feelings of guilt and uneasiness make the

Which of the following statements is correct?

An increase in the real income of a consumer is one result from an increase in the price of a product that the consumer is buying.

A rational consumer will try to achieve the highest indifference curve that his or her income will allow.

After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your choices indicate that the

If the prices of X and Y are $2 and $4 per unit, respectively, and this consumer has $10 in income to spend, to maximize total utility, this consumer should buy

Marginal utility is total utility divided by the number of units consumed.

Refer to the graphs. Pizza and beer are the only two goods Jon consumes. The price of beer is $2.00 per pitcher and pizza is $1.25 per slice. If Jon has only $10 to spend for the evening, which graph represents the set of possible combinations of beer and pizza that he can buy?

Each point on a single indifference curve reflects the same level of total utility for a consumer.

Give a brief description of the law of diminishing marginal utility, and use it to explain the downward slope of the demand curve.

The table shows the utility schedule for a consumer of candy bars. Based on the data in the table, you can conclude that the

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