Exam 7: Consumer Choice: Maximizing Utility and Behavioral Economics

Ari is currently consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers cost $2.50, is Ari consuming the correct quantities of these two goods to be in consumer equilibrium?

Suppose that the MU\P ratio for good X is the same as for good Y: 12 utils per dollar. If the price of good X then rises to $2 from $1, a consumer who seeks to maintain consumer equilibrium will buy more of good __________ until the marginal utility of that good falls to __________ utils.

The 100th game of chess gives Jones more utility than the 32nd game of chess. It follows that

Economists contend that the goal of individuals is to maximize marginal utility.

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

Suppose you are eating slices of pizza and after consuming the first slice you receive 14 utils of total utility, after the second you receive 22 utils of total utility, and after the third 25 utils of total utility. Then

Exhibit 20-6 ​ Refer to Exhibit 20-6. I₁, I₂ and I₃ are indifference curves and line ab is the relevant budget constraint. Point N is

A person is said to be in consumer equilibrium if she

Behavioral economists contend that the traditional economic framework always accurately depicts human behavior.

Consumer equilibrium exists when the

The MU\P ratio for good X is greater than the MU\P ratio for good Y as a result of a fall in the price of good X. To achieve consumer equilibrium, the consumer reallocates dollars from the purchase of good Y to the purchase of good X. In the process, the consumer

Exhibit 20-4 Refer to Exhibit 20-4.  What value goes in blank (B)?

You and your roommate are eating pizza and have already consumed all but the last slice. Your roommate claims that he is hungrier than you and therefore should get the last slice of pizza. Your roommate has made

The law of diminishing marginal utility helps to explain

Exhibit 20-8 ​ Refer to Exhibit 20-8. If the price of good X rises, the budget constraint moves from budget constraint

Smith says she gets 5 utils from consuming the fifth unit of a good whereas Jones says he gets 10 utils from consuming the fifth unit of a good. It follows that

We take one dollar from a pauper and give it to a millionaire. Assuming a diminishing marginal utility of money,

Exhibit 20-3 Refer to Exhibit 20-3. Linda spends $5 a week on apples and oranges. If the price of both goods is $1 per unit, what is Linda's total utility from consuming the optimal bundle of goods?

Don receives 100 utils from consuming two oranges. The utility he derives from consuming the second orange equals 30 utils. Which of the following conclusions is derived from the law of diminishing marginal utility?

A good can have high total utility and low marginal utility.