Question 1

Exhibit 20-7 ​
 
Refer to Exhibit 20-7. The relative price of X in terms of Y is the greatest on graph

Accepted Answer

A) (1). 
B) (2). 
C) (3). 
D) This cannot be determined based on the information provided 
A) (1). 
B) (2). 
C) (3). 
D) This cannot be determined based on the information provided

Question 2

Exhibit 20-2   Refer to Exhibit 20-2. Total utility for all five oranges is

Accepted Answer

A) 70 utils. 
B) 12 utils. 
C) 68 utils. 
D) 80 utils. 
E) 40 utils. 
A) 70 utils. 
B) 12 utils. 
C) 68 utils. 
D) 80 utils. 
E) 40 utils.

Question 3

Consumer equilibrium exists when

Accepted Answer

A) marginal utility for all goods is the same. 
B) total utility is constant. 
C) prices for all goods are the same. 
D) total utility for all goods is the same. 
E) the MU\P ratio for all goods is the same. 
A) marginal utility for all goods is the same. 
B) total utility is constant. 
C) prices for all goods are the same. 
D) total utility for all goods is the same. 
E) the MU\P ratio for all goods is the same.

Question 4

Indifference curves are generally downward sloping and concave to the origin.

Accepted Answer

A) True 
 B)False

Question 5

Describe some of the findings of behavioral economists presented in the textbook and explain how these findings differ from the traditional economic framework.

Accepted Answer

According to behavioral economists, not

Question 6

When people treat some dollars differently than others, they are said to be compartmentalizing .

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is false ?

Accepted Answer

A) A millionaire definitely receives less utility from an additional dollar than a poor person. 
B) A poor person definitely receives less utility from an additional dollar than a rich person. 
C) A millionaire definitely receives the same utility from an additional dollar as a poor person. 
D) A millionaire generally receives less utility from an additional dollar than a poor person. 
E) We do not know if any of the statements are true or false, because we do not know how much utility one person receives relative to another. 
A) A millionaire definitely receives less utility from an additional dollar than a poor person. 
B) A poor person definitely receives less utility from an additional dollar than a rich person. 
C) A millionaire definitely receives the same utility from an additional dollar as a poor person. 
D) A millionaire generally receives less utility from an additional dollar than a poor person. 
E) We do not know if any of the statements are true or false, because we do not know how much utility one person receives relative to another.

Question 8

If the MU\P ratio for good X is less than the MU\P ratio for good Y, this means that

Accepted Answer

A) an individual is receiving more utility per dollar from good Y than good X. 
B) the price of good X is lower than the price of good Y. 
C) the price of good Y is lower than the price of good X. 
D) the MU of good X is lower than the MU of good Y. 
A) an individual is receiving more utility per dollar from good Y than good X. 
B) the price of good X is lower than the price of good Y. 
C) the price of good Y is lower than the price of good X. 
D) the MU of good X is lower than the MU of good Y.

Question 9

If total utility of a good is high while the price of the good is low, it is likely that the good

Accepted Answer

A) is plentiful. 
B) is inferior. 
C) is rare. 
D) has high marginal utility. 
A) is plentiful. 
B) is inferior. 
C) is rare. 
D) has high marginal utility.

Question 10

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

Accepted Answer

A) 55 
B) 110 
C) 80 
D) 95 
E) There is not enough information to answer this question. 
A) 55 
B) 110 
C) 80 
D) 95 
E) There is not enough information to answer this question.

Question 11

Suppose Will receives 190 utils from consuming one banana and 280 utils from consuming two bananas. What is the marginal utility of the second banana?

Accepted Answer

A) 470 utils 
B) 235 utils 
C) 90 utils 
D) 280 utils 
A) 470 utils 
B) 235 utils 
C) 90 utils 
D) 280 utils

Question 12

Total utility is defined as the

Accepted Answer

A) change in marginal utility a person derives from the consumption of a good. 
B) change in total utility a person derives from the consumption of a good divided by the price of that good. 
C) change in total utility a person derives from the consumption of a good divided by the change in the consumption of that good. 
D) sum of the amounts of satisfaction a person receives from consuming a good. 
E) change in total utility a person derives from the consumption of a good. 
A) change in marginal utility a person derives from the consumption of a good. 
B) change in total utility a person derives from the consumption of a good divided by the price of that good. 
C) change in total utility a person derives from the consumption of a good divided by the change in the consumption of that good. 
D) sum of the amounts of satisfaction a person receives from consuming a good. 
E) change in total utility a person derives from the consumption of a good.

Question 13

Given two goods, X and Y, their prices, PX and PY, a consumer is in equilibrium when the last dollar spent on X yields

Accepted Answer

A) zero marginal utility for Y. 
B) the same marginal utility as if all the money were spent on Y. 
C) a smaller marginal utility than the last dollar spent on Y. 
D) the same marginal utility as the last dollar spent on Y. 
A) zero marginal utility for Y. 
B) the same marginal utility as if all the money were spent on Y. 
C) a smaller marginal utility than the last dollar spent on Y. 
D) the same marginal utility as the last dollar spent on Y.

Question 14

Suppose a consumer is purchasing Coke and pretzels in quantities such that she is achieving consumer equilibrium. Then the price of Coke decreases. The consumer will likely __________ her consumption of Coke and the marginal utility of Coke will __________ while the total utility from Coke will __________.

Accepted Answer

A) increase; increase; increase 
B) increase; decrease; decrease 
C) increase; decrease; increase 
D) decrease; increase; increase 
E) decrease; decrease; decrease 
A) increase; increase; increase 
B) increase; decrease; decrease 
C) increase; decrease; increase 
D) decrease; increase; increase 
E) decrease; decrease; decrease

Question 15

Suppose a consumer is purchasing Coke (c)and pretzels (p)in quantities such that he is achieving consumer equilibrium. Then the price of Coke increases. Which of the following will be true?

Accepted Answer

A) MUC\PC = MUP\PP 
B) MUC\PC > MUP\PP 
C) MUC\PC 
D) We cannot say for certain what will happen to the MUC\PC relative to the MUP\PP. 
A) MUC\PC = MUP\PP 
B) MUC\PC > MUP\PP 
C) MUC\PC 
D) We cannot say for certain what will happen to the MUC\PC relative to the MUP\PP.

Question 16

Exhibit 20-5   Refer to Exhibit 20-5.  What value goes in blank (D)?

Accepted Answer

A) 47 
B) 15 
C) 35 
D) 60 
E) There is not enough information to answer this question. 
A) 47 
B) 15 
C) 35 
D) 60 
E) There is not enough information to answer this question.

Question 17

The law of diminishing marginal utility says that

Accepted Answer

A) the marginal utility gained by consuming equal successive units of a good will decline as the amount consumed increases. 
B) the more of a particular good one consumes, the greater is the utility received from the consumption of that good. 
C) the marginal utility gained by consuming equal successive units of a good will increase as the amount consumed increases. 
D) the more of a particular product one sells, the less utility one receives from selling. 
A) the marginal utility gained by consuming equal successive units of a good will decline as the amount consumed increases. 
B) the more of a particular good one consumes, the greater is the utility received from the consumption of that good. 
C) the marginal utility gained by consuming equal successive units of a good will increase as the amount consumed increases. 
D) the more of a particular product one sells, the less utility one receives from selling.

Question 18

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, 146, respectively. The marginal utility of the seventh wing is __________ utils.

Accepted Answer

A) 14 
B) 146 
C) 10 
D) 20.9 
A) 14 
B) 146 
C) 10 
D) 20.9

Question 19

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, how many apples and oranges, respectively, does she purchase per week if she wants to maximize her utility?

Accepted Answer

A) 0 and 5 
B) 1 and 4 
C) 2 and 3 
D) 3 and 2 
A) 0 and 5 
B) 1 and 4 
C) 2 and 3 
D) 3 and 2

Question 20

Exhibit 20-7 ​
 
Refer to Exhibit 20-7. For graph (1), if the price of X is $20, the price of Y is

Accepted Answer

A) $10. 
B) $40. 
C) $80. 
D) $100. 
E) $160. 
A) $10. 
B) $40. 
C) $80. 
D) $100. 
E) $160.

Exam 7: Consumer Choice: Maximizing Utility and Behavioral Economics

Exhibit 20-7 ​ Refer to Exhibit 20-7. The relative price of X in terms of Y is the greatest on graph

Exhibit 20-2 Refer to Exhibit 20-2. Total utility for all five oranges is

Consumer equilibrium exists when

Indifference curves are generally downward sloping and concave to the origin.

Describe some of the findings of behavioral economists presented in the textbook and explain how these findings differ from the traditional economic framework.

When people treat some dollars differently than others, they are said to be compartmentalizing .

Which of the following statements is false ?

If the MU\P ratio for good X is less than the MU\P ratio for good Y, this means that

If total utility of a good is high while the price of the good is low, it is likely that the good

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

Suppose Will receives 190 utils from consuming one banana and 280 utils from consuming two bananas. What is the marginal utility of the second banana?

Total utility is defined as the

Given two goods, X and Y, their prices, PX and PY, a consumer is in equilibrium when the last dollar spent on X yields

Suppose a consumer is purchasing Coke (c)and pretzels (p)in quantities such that he is achieving consumer equilibrium. Then the price of Coke increases. Which of the following will be true?

Exhibit 20-5 Refer to Exhibit 20-5. What value goes in blank (D)?

The law of diminishing marginal utility says that

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, 146, respectively. The marginal utility of the seventh wing is __________ utils.

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, how many apples and oranges, respectively, does she purchase per week if she wants to maximize her utility?

Exhibit 20-7 ​ Refer to Exhibit 20-7. For graph (1), if the price of X is $20, the price of Y is

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Elasticity

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages, Union, and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

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Exhibit 20-7 Refer to Exhibit 20-7. The relative price of X in terms of Y is the greatest on graph

Given two goods, X and Y, their prices, P_X and P_Y, a consumer is in equilibrium when the last dollar spent on X yields

Exhibit 20-7 Refer to Exhibit 20-7. For graph (1), if the price of X is $20, the price of Y is