Question 1

Refer to the figure below. The law of diminishing marginal utility: $$\begin{array} { | c | c | c | } 
\hline \text { Units } & \begin{array} { c } 
\text { Utils Per Year } \
\text { from T-shirts }
\end{array} & \begin{array} { c } 
\text { Utils Per Year } \
\text { from Sweaters }
\end{array} \
\hline 0 & 0 & 0 \
\hline 1 & 75 & 400 \
\hline 2 & 135 & 720 \
\hline 3 & 180 & 960 \
\hline 4 & 210 & 1120 \
\hline
\end{array}$$

Accepted Answer

A) applies to t-shirts but not sweaters. 
B) does not apply to either t-shirts or sweaters. 
C) applies to sweaters but not t-shirts. 
D) applies to both t-shirts and sweaters. 
A) applies to t-shirts but not sweaters. 
B) does not apply to either t-shirts or sweaters. 
C) applies to sweaters but not t-shirts. 
D) applies to both t-shirts and sweaters. D

Question 2

Refer to the figure below. Total utility increases with each additional pizza up to the ______ and then declines, but marginal utility ______ with each additional pizza consumed.

Accepted Answer

A) 7th pizza; increases 
B) 6th pizza; increases 
C) 5th pizza; stays the same 
D) 6th pizza; decreases 
A) 7th pizza; increases 
B) 6th pizza; increases 
C) 5th pizza; stays the same 
D) 6th pizza; decreases D

Question 3

Refer to the figure below. What is the equilibrium quantity of bananas in this market?

Accepted Answer

A) 0 pounds/day 
B) 3 pounds/day 
C) 4 pounds/day 
D) 5 pounds/day 
A) 0 pounds/day 
B) 3 pounds/day 
C) 4 pounds/day 
D) 5 pounds/day D

Question 4

If a consumer reallocates his or her spending away from good A and towards good B, then the consumer's total utility will increase if:

Accepted Answer

A) MUA/PA > MUB/PB B) MUA/PA B/PB C) MUA/PA > 0 and MUB/PB > 0 D) MUA/PA B/PB < 0 A) MUA/PA > MUB/PB B) MUA/PA B/PB C) MUA/PA > 0 and MUB/PB > 0 D) MUA/PA B/PB < 0

Question 5

Cory gets 18, 23, and 25 units worth of total utility from consuming 10, 11, and 12 raw oysters, respectively, and the price per oyster is 25 cents. Thus, one can infer that Cory:

Accepted Answer

A) is not maximizing his utility. 
B) is experiencing diminishing marginal utility. 
C) should not consume any more oysters. 
D) has consumed too many oysters. 
A) is not maximizing his utility. 
B) is experiencing diminishing marginal utility. 
C) should not consume any more oysters. 
D) has consumed too many oysters.

Question 6

Taking a limousine to a five star restaurant in New York is a:

Accepted Answer

A) necessity to Donald Trump but a luxury to Joe Average. 
B) necessity to both Joe Average and Donald Trump. 
C) want to both Joe Average and Donald Trump. 
D) want to Donald Trump and a luxury to Joe Average. 
A) necessity to Donald Trump but a luxury to Joe Average. 
B) necessity to both Joe Average and Donald Trump. 
C) want to both Joe Average and Donald Trump. 
D) want to Donald Trump and a luxury to Joe Average.

Question 7

Taylor's marginal utility from watching movies and from eating out (in utils) is shown below. Taylor spends exactly $100 every month on these two forms of entertainment, and the price of each movie is $10 and the price of each dinner is $20. $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Movies } \
\text { Per Month }
\end{array} & \begin{array} { c } 
\text { Marginal Utility } \
\text { Per Movie }
\end{array} & \begin{array} { c } 
\text { Dinners Out } \
\text { Per Month }
\end{array} & \begin{array} { c } 
\text { Marginal Utility } \
\text { Per Dinner }
\end{array} \
\hline 1 & 60 & 1 & 150 \
\hline 2 & 50 & 2 & 140 \
\hline 3 & 20 & 3 & 120 \
\hline 4 & 5 & 4 & 100 \
\hline
\end{array}$$ If Taylor watches 2 movies a month, Taylor will eat out ______ times per month, and have marginal utility per dollar of ______ from movies and a marginal utility per dollar of ______ from eating out.

Accepted Answer

A) 3; 5; 6 
B) 2; 5; 7 
C) 4; 5; 5 
D) 4; 4; 6 
A) 3; 5; 6 
B) 2; 5; 7 
C) 4; 5; 5 
D) 4; 4; 6

Question 8

Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each week?

Accepted Answer

A) 70 
B) 50 
C) 30 
D) 20 
A) 70 
B) 50 
C) 30 
D) 20

Question 9

In most markets, scarce goods or services are rationed among competing users using:

Accepted Answer

A) non-monetary prices 
B) monetary prices 
C) government organizations 
D) private organizations 
A) non-monetary prices 
B) monetary prices 
C) government organizations 
D) private organizations

Question 10

The additional utility gained from consuming an additional unit of a good is called:

Accepted Answer

A) total utility 
B) marginal utility 
C) costly utility 
D) an util 
A) total utility 
B) marginal utility 
C) costly utility 
D) an util

Question 11

The figure below shows a single consumer's demand for ice cream at the student union.\   If there are 1,000 students on campus during a regular semester, and each student's weekly demand for ice cream is shown above, then when the student union charges $3.00 per scoop, those 1,000 students purchase a total of ______ scoops per week.

Accepted Answer

A) 400 
B) 1,000 
C) 2,000 
D) 4,000 
A) 400 
B) 1,000 
C) 2,000 
D) 4,000

Question 12

Suppose that Coke and Sprite each sell for $2 a can. Each month Joe buys 6 cans of Sprite and 30 cans of Coke. From this we can infer that:

Accepted Answer

A) Joe is buying too many cans of Sprite. 
B) Joe is buying too many cans of Coke. 
C) Joe is maximizing his utility if his marginal utility from the 6th can of Sprite he buys is less than his marginal utility from the 30th can of Coke he buys. 
D) Joe is maximizing his utility if his marginal utility from the 6th can of Sprite he buys is equal to his marginal utility from the 30th can of Coke he buys. 
A) Joe is buying too many cans of Sprite. 
B) Joe is buying too many cans of Coke. 
C) Joe is maximizing his utility if his marginal utility from the 6th can of Sprite he buys is less than his marginal utility from the 30th can of Coke he buys. 
D) Joe is maximizing his utility if his marginal utility from the 6th can of Sprite he buys is equal to his marginal utility from the 30th can of Coke he buys.

Question 13

Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Dusty can buy a maximum of ______ loaves of bread or a maximum of ______ jars of peanut butter.

Accepted Answer

A) 20; 10 
B) 15; 15 
C) 10; 20 
D) 10; 5 
A) 20; 10 
B) 15; 15 
C) 10; 20 
D) 10; 5

Question 14

As the price of computers falls, the quantity of computers demanded increases. This is an application of:

Accepted Answer

A) the law of supply 
B) the production possibilities curve 
C) the law of demand 
D) needs versus wants 
A) the law of supply 
B) the production possibilities curve 
C) the law of demand 
D) needs versus wants

Question 15

Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demand by the three townspeople at various prices. $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Price Per } \
\text { Doughnut }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { by Al }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { by Betty }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded by } \
\text { Carol }
\end{array} \
\hline 10 \text { cents } & 10 & 4 & 6 \
\hline 25 \text { cents } & 9 & 2 & 5 \
\hline 35 \text { cents } & 7 & 1 & 5 \
\hline 50 \text { cents } & 5 & 0 & 4 \
\hline
\end{array}$$ When the price of a doughnut is 25 cents, what is the market demand for doughnuts?

Accepted Answer

A) 9 doughnuts 
B) 13 doughnuts 
C) 16 doughnuts 
D) 20 doughnuts 
A) 9 doughnuts 
B) 13 doughnuts 
C) 16 doughnuts 
D) 20 doughnuts

Question 16

For two goods, coffee and scones, suppose that MU(coffee)/P(coffee) = 4 and MU(scones)/P(scones) = 3. To maximize your total utility from these two goods, you should purchase:

Accepted Answer

A) less coffee and more scones. 
B) more coffee and fewer scones. 
C) less coffee and fewer scones. 
D) more coffee and more scones. 
A) less coffee and more scones. 
B) more coffee and fewer scones. 
C) less coffee and fewer scones. 
D) more coffee and more scones.

Question 17

Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demand by the three townspeople at various prices. $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Price Per } \
\text { Doughnut }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { by Al }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { by Betty }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded by } \
\text { Carol }
\end{array} \
\hline 10 \text { cents } & 10 & 4 & 6 \
\hline 25 \text { cents } & 9 & 2 & 5 \
\hline 35 \text { cents } & 7 & 1 & 5 \
\hline 50 \text { cents } & 5 & 0 & 4 \
\hline
\end{array}$$ When the price of a doughnut is 50 cents, what is the market demand for doughnuts?

Accepted Answer

A) 31 doughnuts 
B) 20 doughnuts 
C) 9 doughnuts 
D) 5 doughnuts 
A) 31 doughnuts 
B) 20 doughnuts 
C) 9 doughnuts 
D) 5 doughnuts

Question 18

Jamie's marginal utility from muffins and from doughnuts (in utils) is shown below. Jamie spends a total of $8 on muffins and/or doughnuts every morning. The price of each muffin is $2 and the price of each doughnut is $1. $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Muffins } \
\text { Per Day }
\end{array} & \begin{array} { c } 
\text { Marginal Utility } \
\text { Per Muffin }
\end{array} & \begin{array} { c } 
\text { Doughnuts } \
\text { Per Day }
\end{array} & \begin{array} { c } 
\text { Marginal Utility } \
\text { Per Doughnut }
\end{array} \
\hline 1 & 40 & 2 & 20 \
\hline 2 & 30 & 4 & 15 \
\hline 3 & 20 & 6 & 10 \
\hline
\end{array}$$ If Jamie consumes 3 muffins a day, then what is her marginal utility per dollar spent on the third muffin?

Accepted Answer

A) 10 
B) 20 
C) 30 
D) 40 
A) 10 
B) 20 
C) 30 
D) 40

Question 19

The rational spending rule is derived from the consumer's desire to

Accepted Answer

A) maximize utility. 
B) minimize expenditures. 
C) obtain the lowest possible price. 
D) maximize the number of goods purchased. 
A) maximize utility. 
B) minimize expenditures. 
C) obtain the lowest possible price. 
D) maximize the number of goods purchased.

Question 20

Refer to the figure below. The total utility of consuming two pizzas a week is:

Accepted Answer

A) 25 
B) 30 
C) 55 
D) 75 
A) 25 
B) 30 
C) 55 
D) 75

Refer to the figure below. The law of diminishing marginal utility: Units Utils Per Year from T-shirts Utils Per Year from Sweaters 0 0 0 1 75 400 2 135 720 3 180 960 4 210 1120

Refer to the figure below. Total utility increases with each additional pizza up to the and then declines, but marginal utility with each additional pizza consumed.

Refer to the figure below. What is the equilibrium quantity of bananas in this market?

If a consumer reallocates his or her spending away from good A and towards good B, then the consumer's total utility will increase if:

Cory gets 18, 23, and 25 units worth of total utility from consuming 10, 11, and 12 raw oysters, respectively, and the price per oyster is 25 cents. Thus, one can infer that Cory:

Taking a limousine to a five star restaurant in New York is a:

Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each week?

In most markets, scarce goods or services are rationed among competing users using:

The additional utility gained from consuming an additional unit of a good is called:

Suppose that Coke and Sprite each sell for $2 a can. Each month Joe buys 6 cans of Sprite and 30 cans of Coke. From this we can infer that:

Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Dusty can buy a maximum of loaves of bread or a maximum of jars of peanut butter.

As the price of computers falls, the quantity of computers demanded increases. This is an application of:

For two goods, coffee and scones, suppose that MU(coffee)/P(coffee) = 4 and MU(scones)/P(scones) = 3. To maximize your total utility from these two goods, you should purchase:

The rational spending rule is derived from the consumer's desire to

Refer to the figure below. The total utility of consuming two pizzas a week is:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Filters

Exam 5: Demand

Refer to the figure below. The law of diminishing marginal utility: Units Utils Per Year from T-shirts Utils Per Year from Sweaters 0 0 0 1 75 400 2 135 720 3 180 960 4 210 1120

Refer to the figure below. Total utility increases with each additional pizza up to the ______ and then declines, but marginal utility ______ with each additional pizza consumed.

Refer to the figure below. What is the equilibrium quantity of bananas in this market?

If a consumer reallocates his or her spending away from good A and towards good B, then the consumer's total utility will increase if:

Cory gets 18, 23, and 25 units worth of total utility from consuming 10, 11, and 12 raw oysters, respectively, and the price per oyster is 25 cents. Thus, one can infer that Cory:

Taking a limousine to a five star restaurant in New York is a:

Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each week?

In most markets, scarce goods or services are rationed among competing users using:

The additional utility gained from consuming an additional unit of a good is called:

Suppose that Coke and Sprite each sell for $2 a can. Each month Joe buys 6 cans of Sprite and 30 cans of Coke. From this we can infer that:

Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Dusty can buy a maximum of ______ loaves of bread or a maximum of ______ jars of peanut butter.

As the price of computers falls, the quantity of computers demanded increases. This is an application of:

For two goods, coffee and scones, suppose that MU(coffee)/P(coffee) = 4 and MU(scones)/P(scones) = 3. To maximize your total utility from these two goods, you should purchase:

The rational spending rule is derived from the consumer's desire to

Refer to the figure below. The total utility of consuming two pizzas a week is:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Filters

Refer to the figure below. Total utility increases with each additional pizza up to the and then declines, but marginal utility with each additional pizza consumed.

Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Dusty can buy a maximum of loaves of bread or a maximum of jars of peanut butter.