Question 1

-Refer to Figure 7.1.The ________ movie rental has a marginal utility of zero.

Accepted Answer

A)  first 
B)  second 
C)  third 
D)  fourth 
A)  first 
B)  second 
C)  third 
D)  fourth D

Question 2

According to economics,why would a consumer download a song illegally?

Accepted Answer

A)  Most people have a criminal mentality. 
B)  The expected cost of the act is greater than the expected benefit. 
C)  There are no other options for most consumers. 
D)  The expected benefit of the act is greater than the expected cost. 
A)  Most people have a criminal mentality. 
B)  The expected cost of the act is greater than the expected benefit. 
C)  There are no other options for most consumers. 
D)  The expected benefit of the act is greater than the expected cost. D

Question 3

Suppose that Carolyn's current level of consumption,MUₓ/Pₓ = 18 and MUᵧ/Pᵧ = 10.Carolyn can increase her utility by increasing her consumption of good Y and reducing her consumption of good X.

Accepted Answer

A) True 
 B)False  False

Question 4

The income effect helps explain the shape of a consumer's demand curve.

Accepted Answer

A) True 
 B)False

Question 5

Recall the Application about how marginal utility changes with the quantity consumed to answer the following question(s). Neuroscientists offered subjects in an experiment varying monetary rewards, and observed the neural activity in a subject's striatum region of the brain.
-Recall the Application.What was shown in the study that the neuroscientists conducted on subjects and their reaction to varying monetary rewards?

Accepted Answer

A)  It showed that general rewards are subject to diminishing marginal utility. 
B)  It showed a direct demonstration of the law of diminishing marginal utility. 
C)  It showed a direct demonstration of the subject's opportunity cost. 
D)  Nothing was shown in the study. 
A)  It showed that general rewards are subject to diminishing marginal utility. 
B)  It showed a direct demonstration of the law of diminishing marginal utility. 
C)  It showed a direct demonstration of the subject's opportunity cost. 
D)  Nothing was shown in the study.

Question 6

The dopamine rewards for near misses are problematic in truly random environments like gambling.

Accepted Answer

A) True 
 B)False

Question 7

People make different choices because they differ in ways that are relevant to consumer decision.Which of the following are those ways?

Accepted Answer

A)  strength of their gut feeling 
B)  weakness of the activity in the NAcc 
C)  cognitive weighting 
D)  A and C are correct. 
A)  strength of their gut feeling 
B)  weakness of the activity in the NAcc 
C)  cognitive weighting 
D)  A and C are correct.

Question 8

-Refer to Figure 7.2.The marginal utility of the third video game rental is

Accepted Answer

A)  1. 
B)  3. 
C)  4. 
D)  22. 
A)  1. 
B)  3. 
C)  4. 
D)  22.

Question 9

Why are humans subject to present bias?

Accepted Answer

A)  They overestimate their future consequences. 
B)  They ignore the gut feeling. 
C)  They underestimate their future consequences. 
D)  They do a good job imagining the strength of future gut feeling. 
A)  They overestimate their future consequences. 
B)  They ignore the gut feeling. 
C)  They underestimate their future consequences. 
D)  They do a good job imagining the strength of future gut feeling.

Question 10

Dan is consuming coffee and bagels so that MUc/Pc = 15 and MUb/Pb = 9.Using the equimarginal rule,Dan should

Accepted Answer

A)  continue to consume the same amount of coffee and bagels, as he is already maximizing utility. 
B)  consume less of both coffee and bagels. 
C)  consume more coffee and less bagels. 
D)  consume less coffee and more bagels. 
A)  continue to consume the same amount of coffee and bagels, as he is already maximizing utility. 
B)  consume less of both coffee and bagels. 
C)  consume more coffee and less bagels. 
D)  consume less coffee and more bagels.

Question 11

Utility is not easy to measure and quantify.

Accepted Answer

A) True 
 B)False

Question 12

The principle of opportunity cost is

Accepted Answer

A)  the opportunity cost of something is what someone sacrifices to get it. 
B)  the satisfaction of obtaining the best next alternative. 
C)  the choice someone has to make between two different goods. 
D)  the cost of paying for something someone needs. 
A)  the opportunity cost of something is what someone sacrifices to get it. 
B)  the satisfaction of obtaining the best next alternative. 
C)  the choice someone has to make between two different goods. 
D)  the cost of paying for something someone needs.

Question 13

Recent experiments by neuroscientists have shown that the more a person thinks about the health consequences of an unhealthy food like a donut,the higher the perceived benefit of the unhealthy food.

Accepted Answer

A) True 
 B)False

Question 14

Table 7.1
-Refer to Table 7.1.The marginal utility of the third donut per day is

Accepted Answer

A)  15. 
B)  20. 
C)  60. 
D)  75. 
A)  15. 
B)  20. 
C)  60. 
D)  75.

Question 15

Table 7.2
-Refer to Table 7.2.Diminishing marginal utility sets in after the ________ slice of pie per day.

Accepted Answer

A)  first 
B)  second 
C)  third 
D)  fourth 
A)  first 
B)  second 
C)  third 
D)  fourth

Question 16

-Refer to Figure 7.1.Increasing the number of movies rented from 3 to 4 will cause total utility to

Accepted Answer

A)  increase. 
B)  decrease. 
C)  stay the same. 
D)  none of the above 
A)  increase. 
B)  decrease. 
C)  stay the same. 
D)  none of the above

Question 17

What have Neuroscientists been able to measure in terms of cash purchases and credit-card purchases?

Accepted Answer

A)  Credit-card purchases generate much stronger insula activity than cash purchases. 
B)  Credit-card purchases generate much weaker insula activity than cash purchases. 
C)  Credit-card purchases generate the same insula activity as cash purchases. 
D)  Neuroscientists have not been able to measure anything about cash or credit card purchases. 
A)  Credit-card purchases generate much stronger insula activity than cash purchases. 
B)  Credit-card purchases generate much weaker insula activity than cash purchases. 
C)  Credit-card purchases generate the same insula activity as cash purchases. 
D)  Neuroscientists have not been able to measure anything about cash or credit card purchases.

Question 18

Suppose that MUₓ/Pₓ < MUᵧ/Pᵧ.This implies that

Accepted Answer

A)  spending a dollar less on Y and spending a dollar more on X increases utility. 
B)  spending a dollar less on X, and spending a dollar more on Y increases utility. 
C)  X is more expensive than Y. 
D)  Y is more expensive than X. 
A)  spending a dollar less on Y and spending a dollar more on X increases utility. 
B)  spending a dollar less on X, and spending a dollar more on Y increases utility. 
C)  X is more expensive than Y. 
D)  Y is more expensive than X.

Question 19

The equimarginal rule says that a person will maximize utility by choosing the good for which the marginal utility is the greatest.

Accepted Answer

A) True 
 B)False

Question 20

Brandon eats four tacos a on a Sunday night but admits each slice of pizza doesn't taste as delicious as the previous one.This suggests that,for Brandon,

Accepted Answer

A)  the marginal utility of a slice of pizza is positive but decreasing. 
B)  the marginal utility of a slice of pizza is negative but increasing. 
C)  the total utility of slice of pizza is declining by larger and larger increments. 
D)  the total utility of slice of pizza is increasing by larger and larger increments. 
A)  the marginal utility of a slice of pizza is positive but decreasing. 
B)  the marginal utility of a slice of pizza is negative but increasing. 
C)  the total utility of slice of pizza is declining by larger and larger increments. 
D)  the total utility of slice of pizza is increasing by larger and larger increments.

-Refer to Figure 7.1.The ________ movie rental has a marginal utility of zero.

According to economics,why would a consumer download a song illegally?

Suppose that Carolyn's current level of consumption,MUₓ/Pₓ = 18 and MUᵧ/Pᵧ = 10.Carolyn can increase her utility by increasing her consumption of good Y and reducing her consumption of good X.

The income effect helps explain the shape of a consumer's demand curve.

The dopamine rewards for near misses are problematic in truly random environments like gambling.

People make different choices because they differ in ways that are relevant to consumer decision.Which of the following are those ways?

-Refer to Figure 7.2.The marginal utility of the third video game rental is

Why are humans subject to present bias?

Dan is consuming coffee and bagels so that MU_c/P_c = 15 and MU_b/P_b = 9.Using the equimarginal rule,Dan should

Utility is not easy to measure and quantify.

The principle of opportunity cost is

Recent experiments by neuroscientists have shown that the more a person thinks about the health consequences of an unhealthy food like a donut,the higher the perceived benefit of the unhealthy food.

Table 7.1 -Refer to Table 7.1.The marginal utility of the third donut per day is

Table 7.2 -Refer to Table 7.2.Diminishing marginal utility sets in after the ________ slice of pie per day.

-Refer to Figure 7.1.Increasing the number of movies rented from 3 to 4 will cause total utility to

What have Neuroscientists been able to measure in terms of cash purchases and credit-card purchases?

Suppose that MUₓ/Pₓ < MUᵧ/Pᵧ.This implies that

The equimarginal rule says that a person will maximize utility by choosing the good for which the marginal utility is the greatest.

Brandon eats four tacos a on a Sunday night but admits each slice of pizza doesn't taste as delicious as the previous one.This suggests that,for Brandon,

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 7: Consumer Choice: Utility Theory and Insights From Neuroscience

-Refer to Figure 7.1.The ________ movie rental has a marginal utility of zero.

According to economics,why would a consumer download a song illegally?

Suppose that Carolyn's current level of consumption,MUₓ/Pₓ = 18 and MUᵧ/Pᵧ = 10.Carolyn can increase her utility by increasing her consumption of good Y and reducing her consumption of good X.

The income effect helps explain the shape of a consumer's demand curve.

The dopamine rewards for near misses are problematic in truly random environments like gambling.

People make different choices because they differ in ways that are relevant to consumer decision.Which of the following are those ways?

-Refer to Figure 7.2.The marginal utility of the third video game rental is

Why are humans subject to present bias?

Dan is consuming coffee and bagels so that MUc/Pc = 15 and MUb/Pb = 9.Using the equimarginal rule,Dan should

Utility is not easy to measure and quantify.

The principle of opportunity cost is

Recent experiments by neuroscientists have shown that the more a person thinks about the health consequences of an unhealthy food like a donut,the higher the perceived benefit of the unhealthy food.

Table 7.1 -Refer to Table 7.1.The marginal utility of the third donut per day is

Table 7.2 -Refer to Table 7.2.Diminishing marginal utility sets in after the ________ slice of pie per day.

-Refer to Figure 7.1.Increasing the number of movies rented from 3 to 4 will cause total utility to

What have Neuroscientists been able to measure in terms of cash purchases and credit-card purchases?

Suppose that MUₓ/Pₓ < MUᵧ/Pᵧ.This implies that

The equimarginal rule says that a person will maximize utility by choosing the good for which the marginal utility is the greatest.

Brandon eats four tacos a on a Sunday night but admits each slice of pizza doesn't taste as delicious as the previous one.This suggests that,for Brandon,

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Dan is consuming coffee and bagels so that MU_c/P_c = 15 and MU_b/P_b = 9.Using the equimarginal rule,Dan should