Question 1

Which of the following statements is false?

Accepted Answer

A)  If marginal utility is diminishing, then total utility is increasing but at a decreasing rate. 
B)  If marginal utility is diminishing, then total utility is concave. 
C)  If marginal utility is negative, then total utility is downward-sloping. 
D)  If marginal utility is decreasing, then total utility is decreasing. 
A)  If marginal utility is diminishing, then total utility is increasing but at a decreasing rate. 
B)  If marginal utility is diminishing, then total utility is concave. 
C)  If marginal utility is negative, then total utility is downward-sloping. 
D)  If marginal utility is decreasing, then total utility is decreasing.

Question 2

Consider the utility function U = 5x +3y2,which has MUx = 5 and MUy = 6y.The indifference curves for this utility function

Accepted Answer

A)  will have a diminishing marginal rate of substitution of   for   as x increases. 
B)  will have a constant marginal rate of substitution of   for   as x increases. 
C)  will have an increasing marginal rate of substitution of   for   as x increases. 
D)  will be straight lines. 
A)  will have a diminishing marginal rate of substitution of   for   as x increases. 
B)  will have a constant marginal rate of substitution of   for   as x increases. 
C)  will have an increasing marginal rate of substitution of   for   as x increases. 
D)  will be straight lines.

Question 3

Suppose that a consumer has the utility function U = 5X + 7Y.The MRSx,y  is

Accepted Answer

A)  7/5 
B)  5/7 
C)  1.00 since X and Y are perfect substitutes. 
D)  0 since X and Y are perfect complements. 
A)  7/5 
B)  5/7 
C)  1.00 since X and Y are perfect substitutes. 
D)  0 since X and Y are perfect complements.

Question 4

If a consumer would rather eat three bars of chocolate than four bars of chocolate,this consumer's preferences violate which of the following key assumptions?

Accepted Answer

A)  Completeness. 
B)  Transitivity. 
C)  More is better. 
D)  Both completeness and transitivity. 
A)  Completeness. 
B)  Transitivity. 
C)  More is better. 
D)  Both completeness and transitivity.

Question 5

Suppose that a consumer has utility function U(x,y) with MUx = 5y2x and MUy = 2x2y.What is the marginal rate of substitution?

Accepted Answer

A)  10y3x3 
B)  2x/5y 
C)  5y/2x 
D)  5y2x2 
A)  10y3x3 
B)  2x/5y 
C)  5y/2x 
D)  5y2x2

Question 6

Economists sometimes represent two goods as having right-angled indifference curves (perfect complements).In reality,this violates:

Accepted Answer

A)  the assumption of transitivity. 
B)  the assumption of completeness. 
C)  the law of diminishing returns. 
D)  the "more is better" assumption. 
A)  the assumption of transitivity. 
B)  the assumption of completeness. 
C)  the law of diminishing returns. 
D)  the "more is better" assumption.

Question 7

Consumer preferences:

Accepted Answer

A)  are fixed exogenously and unchanging in reality. 
B)  indicate how a consumer would rank any two possible baskets of goods, taking into account her budget constraint. 
C)  indicate how a consumer would rank any two possible baskets of goods, taking into account the current prices of those goods. 
D)  indicate how a consumer would rank any two possible baskets of goods, assuming that the baskets were available to the consumer at no cost. 
A)  are fixed exogenously and unchanging in reality. 
B)  indicate how a consumer would rank any two possible baskets of goods, taking into account her budget constraint. 
C)  indicate how a consumer would rank any two possible baskets of goods, taking into account the current prices of those goods. 
D)  indicate how a consumer would rank any two possible baskets of goods, assuming that the baskets were available to the consumer at no cost.

Question 8

Indifference curves have a negative slope when

Accepted Answer

A)  the consumer likes good   but dislikes good   . 
B)  the consumer likes good   but dislikes good   . 
C)  the consumer likes both good   and good   . 
D)  the consumer dislikes both goods. 
A)  the consumer likes good   but dislikes good   . 
B)  the consumer likes good   but dislikes good   . 
C)  the consumer likes both good   and good   . 
D)  the consumer dislikes both goods.

Question 9

Jacob's estimated utility from pizza is given by 3Z,where Z is the number of pizzas he consumes per month.We can say that:

Accepted Answer

A)  Jacob likes pizza better than steak. 
B)  Jacob is a vegetarian. 
C)  Jacob's preferences are transitive. 
D)  Jacob's marginal utility from pizza is constant. 
A)  Jacob likes pizza better than steak. 
B)  Jacob is a vegetarian. 
C)  Jacob's preferences are transitive. 
D)  Jacob's marginal utility from pizza is constant.

Question 10

One adhesive having twice the adhesive power of another is an example of

Accepted Answer

A)  Ordinal ranking. 
B)  Johnson's theory of adhesivity. 
C)  Cardinal ranking. 
D)  Transitivity. 
A)  Ordinal ranking. 
B)  Johnson's theory of adhesivity. 
C)  Cardinal ranking. 
D)  Transitivity.

Question 11

An indifference curve represents

Accepted Answer

A)  a two-dimensional "slice" of a three-dimensional total utility function. 
B)  varying levels of a total utility function. 
C)  constant marginal utility. 
D)  the slope of marginal utility. 
A)  a two-dimensional "slice" of a three-dimensional total utility function. 
B)  varying levels of a total utility function. 
C)  constant marginal utility. 
D)  the slope of marginal utility.

Question 12

The assumption that more is better requires the consumer

Accepted Answer

A)  to rank any two baskets. 
B)  to say that basket is preferred to basket if basket is preferred to basket and basket is preferred to basket . 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution. 
A)  to rank any two baskets. 
B)  to say that basket is preferred to basket if basket is preferred to basket and basket is preferred to basket . 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution.

Question 13

If I prefer steak to burritos,burritos to pasta and pasta to steak:

Accepted Answer

A)  My preferences are irrational. 
B)  My preferences violate the transitivity assumption. 
C)  My preferences violate the "more is better assumption. 
D)  I must have been exhibiting diminishing marginal utility. 
A)  My preferences are irrational. 
B)  My preferences violate the transitivity assumption. 
C)  My preferences violate the "more is better assumption. 
D)  I must have been exhibiting diminishing marginal utility.

Question 14

2.Assume that two baskets and lie on the same indifference curve.Assume that basket contains more of good than basket but less of good than basket .As the consumer moves down and to the right (from basket to basket ) along his indifference curve,total utility

Accepted Answer

A)  increases. 
B)  remains constant. 
C)  decreases. 
D)  is ambiguous. 
A)  increases. 
B)  remains constant. 
C)  decreases. 
D)  is ambiguous.

Question 15

The assumption that preferences are transitive requires the consumer

Accepted Answer

A)  to rank any two baskets. 
B)  to say that basket is preferred to basket if basket is preferred to basket and basket is preferred to basket . 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution. 
A)  to rank any two baskets. 
B)  to say that basket is preferred to basket if basket is preferred to basket and basket is preferred to basket . 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution.

Question 16

Assume that a consumer prefers watching Yu-Gi-Oh to watching Teen Titans,and that this same consumer prefers watching Teen Titans to watching Sponge Bob.Further assume that this same consumer states,"I would prefer to watch Sponge Bob to watching Yu-Gi-Oh." This consumer's preferences violate which of the following key assumptions?

Accepted Answer

A)  Completeness. 
B)  Transitivity. 
C)  More is better. 
D)  Both completeness and transitivity. 
A)  Completeness. 
B)  Transitivity. 
C)  More is better. 
D)  Both completeness and transitivity.

Question 17

The assumption that preferences are complete requires the consumer

Accepted Answer

A)  to rank any two baskets. 
B)  to say that basket C is preferred to basket A if basket B is preferred to basket A and basket C is preferred to basket B. 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution. 
A)  to rank any two baskets. 
B)  to say that basket C is preferred to basket A if basket B is preferred to basket A and basket C is preferred to basket B. 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution.

Question 18

Which of the following utility functions is an example of Cobb-Douglas preferences?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 19

Which of the following statements best explains the concept of diminishing marginal utility?

Accepted Answer

A)  As I consume additional ice cream cones, each ice cream cone adds more to my total happiness than the previous one. 
B)  I must consume ice cream cones until I have a stomach ache. 
C)  As I consume additional ice cream cones, each ice cream cone adds less to my total happiness than the previous one. 
D)  I must maximize my consumption of ice cream cones. 
A)  As I consume additional ice cream cones, each ice cream cone adds more to my total happiness than the previous one. 
B)  I must consume ice cream cones until I have a stomach ache. 
C)  As I consume additional ice cream cones, each ice cream cone adds less to my total happiness than the previous one. 
D)  I must maximize my consumption of ice cream cones.

Question 20

54.If two goods are perfect complements,then

Accepted Answer

A)  the marginal rate of substitution is constant. 
B)  the indifference curves are straight lines. 
C)  the indifference curves are "L-shaped." 
D)  both a) and b) are true. 
A)  the marginal rate of substitution is constant. 
B)  the indifference curves are straight lines. 
C)  the indifference curves are "L-shaped." 
D)  both a) and b) are true.

Which of the following statements is false?

Consider the utility function U = 5x +3y²,which has MU_x = 5 and MU_y = 6y.The indifference curves for this utility function

Suppose that a consumer has the utility function U = 5X + 7Y.The MRS_x,y is

If a consumer would rather eat three bars of chocolate than four bars of chocolate,this consumer's preferences violate which of the following key assumptions?

Suppose that a consumer has utility function U(x,y) with MU_x = 5y²x and MU_y = 2x²y.What is the marginal rate of substitution?

Economists sometimes represent two goods as having right-angled indifference curves (perfect complements).In reality,this violates:

Consumer preferences:

Indifference curves have a negative slope when

Jacob's estimated utility from pizza is given by 3Z,where Z is the number of pizzas he consumes per month.We can say that:

One adhesive having twice the adhesive power of another is an example of

An indifference curve represents

The assumption that more is better requires the consumer

If I prefer steak to burritos,burritos to pasta and pasta to steak:

2.Assume that two baskets and lie on the same indifference curve.Assume that basket contains more of good than basket but less of good than basket .As the consumer moves down and to the right (from basket to basket ) along his indifference curve,total utility

The assumption that preferences are transitive requires the consumer

The assumption that preferences are complete requires the consumer

Which of the following utility functions is an example of Cobb-Douglas preferences?

Which of the following statements best explains the concept of diminishing marginal utility?

54.If two goods are perfect complements,then

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Exam 3: Consumer Preferences and the Concept of Utility

Which of the following statements is false?

Consider the utility function U = 5x +3y2,which has MUx = 5 and MUy = 6y.The indifference curves for this utility function

Suppose that a consumer has the utility function U = 5X + 7Y.The MRSx,y is

If a consumer would rather eat three bars of chocolate than four bars of chocolate,this consumer's preferences violate which of the following key assumptions?

Suppose that a consumer has utility function U(x,y) with MUx = 5y2x and MUy = 2x2y.What is the marginal rate of substitution?

Economists sometimes represent two goods as having right-angled indifference curves (perfect complements).In reality,this violates:

Consumer preferences:

Indifference curves have a negative slope when

Jacob's estimated utility from pizza is given by 3Z,where Z is the number of pizzas he consumes per month.We can say that:

One adhesive having twice the adhesive power of another is an example of

An indifference curve represents

The assumption that more is better requires the consumer

If I prefer steak to burritos,burritos to pasta and pasta to steak:

2.Assume that two baskets and lie on the same indifference curve.Assume that basket contains more of good than basket but less of good than basket .As the consumer moves down and to the right (from basket to basket ) along his indifference curve,total utility

The assumption that preferences are transitive requires the consumer

The assumption that preferences are complete requires the consumer

Which of the following utility functions is an example of Cobb-Douglas preferences?

Which of the following statements best explains the concept of diminishing marginal utility?

54.If two goods are perfect complements,then

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Consider the utility function U = 5x +3y²,which has MU_x = 5 and MU_y = 6y.The indifference curves for this utility function

Suppose that a consumer has the utility function U = 5X + 7Y.The MRS_x,y is

Suppose that a consumer has utility function U(x,y) with MU_x = 5y²x and MU_y = 2x²y.What is the marginal rate of substitution?