Question 1

The budget line and the demand curve are both similar in the way that both show the price of a good that a consumer can buy.

Accepted Answer

A) True 
 B)False

Question 2

Maxine has a fixed income per month to spend on goods and services,so in allocating her limited income over a set of goods,she should purchase the goods that

Accepted Answer

A)  have the highest utility regardless of price. 
B)  have the highest marginal utility. 
C)  provide the most utility per dollar spent. 
D)  have equal marginal utilities. 
A)  have the highest utility regardless of price. 
B)  have the highest marginal utility. 
C)  provide the most utility per dollar spent. 
D)  have equal marginal utilities.

Question 3

When the price of a good falls,the ratio of the marginal utility of that good divided by its price ________ and as a result,consumers purchase ________ of that good.

Accepted Answer

A)  rises; more 
B)  falls; more 
C)  rises; less 
D)  falls; less 
A)  rises; more 
B)  falls; more 
C)  rises; less 
D)  falls; less

Question 4

If marginal utility is negative,consuming an additional unit of a product will cause total utility to decline.

Accepted Answer

A) True 
 B)False

Question 5

One explanation for the development of online music services is

Accepted Answer

A)  these services will help reduce the incidence of of piracy. 
B)  consumers do not care about the price they pay for one song. 
C)  consumers stopped purchasing CDs. 
D)  the government mandated this market. 
A)  these services will help reduce the incidence of of piracy. 
B)  consumers do not care about the price they pay for one song. 
C)  consumers stopped purchasing CDs. 
D)  the government mandated this market.

Question 6

________ is a simple rule for dealing with a complex situation which provides a "fast and frugal" decision.

Accepted Answer

A)  A present bias 
B)  The Nacc 
C)  Cognitive response 
D)  Heuristic 
A)  A present bias 
B)  The Nacc 
C)  Cognitive response 
D)  Heuristic

Question 7

Marginal utility is defined as the

Accepted Answer

A)  additional utility gained by consuming an extra unit of a good. 
B)  total utility from all units consumed of a good. 
C)  total utility from all units consumed divided by the number of units consumed. 
D)  additional utility gained divided by the price of the good. 
A)  additional utility gained by consuming an extra unit of a good. 
B)  total utility from all units consumed of a good. 
C)  total utility from all units consumed divided by the number of units consumed. 
D)  additional utility gained divided by the price of the good.

Question 8

Table 7.8
-Refer to Table 7.8.Jessy spends no more than $75 per month on movies and eating out.The price of a movie is $8 and the price of a meal out is $15.If Jessy watches two movies per month,what is her marginal utility per dollar?

Accepted Answer

A)  80 
B)  12 
C)  10 
D)  9 
A)  80 
B)  12 
C)  10 
D)  9

Question 9

What is the equimarginal rule?

Accepted Answer

A consumer is maximizing utili

Question 10

Table 7.3
-Refer to Table 7.3.The effect of the law of diminishing marginal utility is seen after

Accepted Answer

A)  the first movie and the first book. 
B)  the fifth movie and the second book. 
C)  the eighth movie and eighth book. 
D)  None of the above; this is a case where the law does not apply. 
A)  the first movie and the first book. 
B)  the fifth movie and the second book. 
C)  the eighth movie and eighth book. 
D)  None of the above; this is a case where the law does not apply.

Question 11

-Refer to Figure 7.3.The total utility from consuming 2 slices of pie is

Accepted Answer

A)  4. 
B)  7. 
C)  12. 
D)  15. 
A)  4. 
B)  7. 
C)  12. 
D)  15.

Question 12

If marginal utility is positive,consuming an additional unit of a product will cause total utility to decline.

Accepted Answer

A) True 
 B)False

Question 13

Recent work in neuroscience shows that different regions of the brain are involved in the valuation of the benefits and costs of possible actions.

Accepted Answer

A) True 
 B)False

Question 14

What is the difference between total utility and marginal utility?

Accepted Answer

Total utility is the total amount of sat

Question 15

Recall the Application about the appropriate amount for a cigarette tax to answer the following question(s).
-A cigarette tax imposes a relatively large tax burden on ________ households,and the authors of the study suggest that the cigarette tax would be beneficial for ________ households.

Accepted Answer

A)  low-income; low-income 
B)  high-income; high-income 
C)  high-income; middle-income 
D)  middle-income; high-income 
A)  low-income; low-income 
B)  high-income; high-income 
C)  high-income; middle-income 
D)  middle-income; high-income

Question 16

If a decrease in consumer prices and a decrease of a consumer's nominal income offset each other by the same amount,the consumer's real income is not changed.

Accepted Answer

A) True 
 B)False

Question 17

Table 7.2
-Refer to Table 7.2.The marginal utility of the fourth slice of pie per day is

Accepted Answer

A)  75. 
B)  20. 
C)  15. 
D)  3. 
A)  75. 
B)  20. 
C)  15. 
D)  3.

Question 18

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the ________ the price of a product,the ________ the insula activity.

Accepted Answer

A)  lower; stronger 
B)  higher; stronger 
C)  higher; weaker 
D)  none of the above 
A)  lower; stronger 
B)  higher; stronger 
C)  higher; weaker 
D)  none of the above

Question 19

As an individual consumes more of a good,total utility always increases and marginal utility always decreases.

Accepted Answer

A) True 
 B)False

Question 20

Neuroscientists have developed techniques to do which of the following?

Accepted Answer

A)  map activity involved in the valuation of the benefits and costs of various actions, including a consumer's product choice 
B)  discover the ways to learn about the opportunity costs 
C)  learn how people react when they are better off 
D)  observe the responsiveness to discounts 
A)  map activity involved in the valuation of the benefits and costs of various actions, including a consumer's product choice 
B)  discover the ways to learn about the opportunity costs 
C)  learn how people react when they are better off 
D)  observe the responsiveness to discounts

The budget line and the demand curve are both similar in the way that both show the price of a good that a consumer can buy.

Maxine has a fixed income per month to spend on goods and services,so in allocating her limited income over a set of goods,she should purchase the goods that

When the price of a good falls,the ratio of the marginal utility of that good divided by its price and as a result,consumers purchase of that good.

If marginal utility is negative,consuming an additional unit of a product will cause total utility to decline.

One explanation for the development of online music services is

________ is a simple rule for dealing with a complex situation which provides a "fast and frugal" decision.

Marginal utility is defined as the

Table 7.8 -Refer to Table 7.8.Jessy spends no more than $75 per month on movies and eating out.The price of a movie is $8 and the price of a meal out is $15.If Jessy watches two movies per month,what is her marginal utility per dollar?

What is the equimarginal rule?

Table 7.3 -Refer to Table 7.3.The effect of the law of diminishing marginal utility is seen after

-Refer to Figure 7.3.The total utility from consuming 2 slices of pie is

If marginal utility is positive,consuming an additional unit of a product will cause total utility to decline.

Recent work in neuroscience shows that different regions of the brain are involved in the valuation of the benefits and costs of possible actions.

What is the difference between total utility and marginal utility?

Recall the Application about the appropriate amount for a cigarette tax to answer the following question(s). -A cigarette tax imposes a relatively large tax burden on households,and the authors of the study suggest that the cigarette tax would be beneficial for households.

If a decrease in consumer prices and a decrease of a consumer's nominal income offset each other by the same amount,the consumer's real income is not changed.

Table 7.2 -Refer to Table 7.2.The marginal utility of the fourth slice of pie per day is

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the the price of a product,the the insula activity.

As an individual consumes more of a good,total utility always increases and marginal utility always decreases.

Neuroscientists have developed techniques to do which of the following?

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

The budget line and the demand curve are both similar in the way that both show the price of a good that a consumer can buy.

Maxine has a fixed income per month to spend on goods and services,so in allocating her limited income over a set of goods,she should purchase the goods that

When the price of a good falls,the ratio of the marginal utility of that good divided by its price ________ and as a result,consumers purchase ________ of that good.

If marginal utility is negative,consuming an additional unit of a product will cause total utility to decline.

One explanation for the development of online music services is

________ is a simple rule for dealing with a complex situation which provides a "fast and frugal" decision.

Marginal utility is defined as the

Table 7.8 -Refer to Table 7.8.Jessy spends no more than $75 per month on movies and eating out.The price of a movie is $8 and the price of a meal out is $15.If Jessy watches two movies per month,what is her marginal utility per dollar?

What is the equimarginal rule?

Table 7.3 -Refer to Table 7.3.The effect of the law of diminishing marginal utility is seen after

-Refer to Figure 7.3.The total utility from consuming 2 slices of pie is

If marginal utility is positive,consuming an additional unit of a product will cause total utility to decline.

Recent work in neuroscience shows that different regions of the brain are involved in the valuation of the benefits and costs of possible actions.

What is the difference between total utility and marginal utility?

Recall the Application about the appropriate amount for a cigarette tax to answer the following question(s). -A cigarette tax imposes a relatively large tax burden on ________ households,and the authors of the study suggest that the cigarette tax would be beneficial for ________ households.

If a decrease in consumer prices and a decrease of a consumer's nominal income offset each other by the same amount,the consumer's real income is not changed.

Table 7.2 -Refer to Table 7.2.The marginal utility of the fourth slice of pie per day is

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the ________ the price of a product,the ________ the insula activity.

As an individual consumes more of a good,total utility always increases and marginal utility always decreases.

Neuroscientists have developed techniques to do which of the following?

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

When the price of a good falls,the ratio of the marginal utility of that good divided by its price and as a result,consumers purchase of that good.

Recall the Application about the appropriate amount for a cigarette tax to answer the following question(s). -A cigarette tax imposes a relatively large tax burden on households,and the authors of the study suggest that the cigarette tax would be beneficial for households.

Neuron activity in the insula represents the dollar cost of buying a product.Although the mechanism that calibrates the insula has so far been elusive,we do know that the the price of a product,the the insula activity.