Exam 5: Happiness, Utility, and Consumer Choice

You've read about a soldier who, in the heat of battle, willingly sacrifices his or her life to save the lives of fellow soldiers. How can you best explain such a sacrifice in terms of utility analysis?

Think about indifference analysis. If a consumer is indifferent between 5 units of A and 8 units of B, then the consumer would

What's the relationship between total utility (TU) and marginal utility (MU)?

Suppose that Dianne Lindsay spends all her income on two goods, A and B, in a manner in which the marginal utility to price ratios are not equal, MU_a/P_a is greater thanMU_b/P_b. If at that time the price of A is higher than the price of B, then she

If a runner's demand for bottled water increases, and the market price remains unchanged, the runner's consumer surplus

The difference between the maximum amount a person would be willing to pay for a good and the amount that a person actually pays is called

The law of diminishing marginal utility says that

Nick Lewis is a strict vegetarian and dislikes the sight and smell of meat products. He buys a raffle ticket supporting the Josh Gottheil Memorial Fund for Lymphoma Research and wins the 3rd prize: a year's supply of hamburger meat. He is willing to trade with his meat-loving friends, and a trade ensues. This is because the

If the total utility Jack receives from 10 gallons of gasoline is 16, and the total utility Jack receives from 11 gallons of gasoline is 20, the marginal utility of the 11th gallon of gasoline is

Economists must actually measure the utilities of goods to determine demand.

Utility theory assumes that marginal utility of a good

-Refer to Exhibit E-4 (on the following page), which represents Chad's demand for bicycle rentals. At the equilibrium price of $4, Chad will demand how many hours of bicycle rental?

Which of the following do you know for certain is true?

If the marginal utilities of the first 5 candy bars are 15, 14, 10, 7, and 3, respectively, the total utility derived from consuming all 5 candy bars is

A consumer purchases just two goods: X and Y. If the price of one good X rises, the consumer buys less of good X and the same amount of good Y.

Moving from one curve to another in an indifference map always increases utility.

If, after a person buys a set of goods with his/her income and total utility is not maximized, then

If you talk to people who are addicted to alcohol, they will tell you that the more they consume, the more they long for and value the next drink. If you think about their sorry predicament in terms of utility analysis, you can conclude about their consumption of alcohol that

In economics, interpersonal comparisons of utility

Sam McGarrity inherited $500,000 upon his favorite aunt's death. After this event it was observed by the local butcher that Sam was purchasing more steaks than in the past even though the butcher's advertising had provided no new information about his steaksin the past year. Most likely,