Exam 7: Consumer Choice: Maximizing Utility and Behavioral Economics

Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 80, 116, 136, 150, respectively. The marginal utility of the sixth wing is __________ utils.

Exhibit 20-1 Refer to Exhibit 20-1. The marginal utility of the fourth plum is

Exhibit 20-1 Refer to Exhibit 20-1. The marginal utility of the third plum is

In which of the following settings is an interpersonal utility comparison being made?

Which of the following statements is true?

If the marginal utility of a good is negative, then

Dan is currently consuming 10 Cokes and 5 slices of pizza per week such that the marginal utility of the tenth Coke is 12 utils and that of the fifth slice of pizza is also 12 utils. How should Dan redirect his purchases so as to attain consumer equilibrium?

Exhibit 20-6 ​ Refer to Exhibit 20-6. I₁, I₂ and I₃ are indifference curves and line ab is the relevant budget constraint. The equilibrium position for the consumer is at

Suppose that a consumer purchases a combination of X and Y such that MU_X\P_X = 15 utils per dollar and MU_Y \P_Y = 10 utils per dollar. To maximize utility, the consumer should buy

We would expect the total utility of water to be high but its marginal utility to be low. Why?

This is the solution to the diamond-water paradox: Those things that have high value in use sometimes have low prices because they are consumed at low __________ utility; those things that have low value in use sometimes have high prices because they are consumed at high __________utility.

A person is in consumer equilibrium, and then the price rises for one of the goods she purchases. If she wants to restore herself to consumer equilibrium, she will (most likely)

A util is an artificial construct used as a means of measuring the

If the rate of increase of total utility declines as the quantity consumed of a good increases, it follows that marginal utility must be

Suppose the government provides peanut butter to everyone free of charge and everyone consumes it to the point at which he receives no additional satisfaction from another spoonful. According to economics, is this necessarily good?

Don receives 100 utils from consuming two oranges. The utility he derives from consuming the second orange equals 30 utils. The information provided

Suppose Alice receives 150 utils from consuming one hamburger and 70 utils from consuming a second hamburger. What is the marginal utility of the second hamburger?

If a person's income and the prices of both goods all rise by the same percentage, then her budget constraint

Exhibit 20-3 ​ Refer to Exhibit 20-3. Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of

The theory of consumer choice assumes that consumers attempt to maximize