Question 1

Each point along an indifference curve represents a different amount of total utility for a consumer.

Accepted Answer

A) True 
 B)False

Question 2

Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively.The total utility for the first unit is:

Accepted Answer

A)  125. 
B)  150. 
C)  200. 
D)  350. 
A)  125. 
B)  150. 
C)  200. 
D)  350.

Question 3

In the Case in Point on P.O.W.camps, the point was made that:

Accepted Answer

A)  people may attempt to maximize utility in normal situations, but when under the stress of being a prisoner such "rational" behavior disappears. 
B)  people generally tend to behave in ways that are consistent with utility-maximizing behavior. 
C)  tastes and preferences are irrelevant when considering the indifference curves of people from different cultures. 
D)  French and British prisoners of war were grateful for any provisions they received and tended to consume all of what they were given in similar quantities. 
A)  people may attempt to maximize utility in normal situations, but when under the stress of being a prisoner such "rational" behavior disappears. 
B)  people generally tend to behave in ways that are consistent with utility-maximizing behavior. 
C)  tastes and preferences are irrelevant when considering the indifference curves of people from different cultures. 
D)  French and British prisoners of war were grateful for any provisions they received and tended to consume all of what they were given in similar quantities.

Question 4

The law of diminishing marginal utility exists for the first three units of a good if they have total utilities of:

Accepted Answer

A)  8, 17, 27. 
B)  9, 17, 27. 
C)  9, 19, 30. 
D)  10, 19, 27. 
A)  8, 17, 27. 
B)  9, 17, 27. 
C)  9, 19, 30. 
D)  10, 19, 27.

Question 5

A line representing all the possible combinations of two commodities that a consumer can purchase at a particular time, given the market prices of the commodities and the consumer's income, is a(n):

Accepted Answer

A)  budget line. 
B)  consumption line. 
C)  income consumption curve. 
D)  indifference curve. 
A)  budget line. 
B)  consumption line. 
C)  income consumption curve. 
D)  indifference curve.

Question 6

Use the following to answer question(s): Consumer Equilibrium 3
  
-(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point K.Given budget constraint FL, utility can be increased by moving to point:

Accepted Answer

A)  F. 
B)  G. 
C)  H. 
D)  I. 
A)  F. 
B)  G. 
C)  H. 
D)  I.

Question 7

Which of the following is (are) true?

Accepted Answer

A)  The goal of a consumer is to maximize utility. 
B)  A consumer will consume each good at a level that yields the maximum utility possible. 
C)  Rich consumers are not constrained by income or budget constraints. 
D)  A and C are true. 
A)  The goal of a consumer is to maximize utility. 
B)  A consumer will consume each good at a level that yields the maximum utility possible. 
C)  Rich consumers are not constrained by income or budget constraints. 
D)  A and C are true.

Question 8

Use the following to answer question(s):  
-(Exhibit: Utility) Marginal utility first becomes negative at the _______ unit.

Accepted Answer

A)  first 
B)  second 
C)  fifth 
D)  sixth 
A)  first 
B)  second 
C)  fifth 
D)  sixth

Question 9

Utility maximization for all goods requires that:

Accepted Answer

A)  the marginal utilities of all goods consumed divided by their prices are equal to the budget constraint. 
B)  the marginal utilities of all goods exceed the total utility of all goods. 
C)  the marginal utilities of all goods divided by their respective prices are equal. 
D)  all of the above be true. 
A)  the marginal utilities of all goods consumed divided by their prices are equal to the budget constraint. 
B)  the marginal utilities of all goods exceed the total utility of all goods. 
C)  the marginal utilities of all goods divided by their respective prices are equal. 
D)  all of the above be true.

Question 10

The textbook states that the law of demand:

Accepted Answer

A)  is nonsense. 
B)  is difficult to verify. 
C)  is confirmed by our real-world experience. 
D)  is not valid in theory. 
A)  is nonsense. 
B)  is difficult to verify. 
C)  is confirmed by our real-world experience. 
D)  is not valid in theory.

Question 11

You decide to increase the quantity of pizza purchased each month when the price decreases in part because the lower price causes an implicit increase in your income.This is an indication of the:

Accepted Answer

A)  output effect. 
B)  income effect. 
C)  substitution effect. 
D)  distribution effect. 
A)  output effect. 
B)  income effect. 
C)  substitution effect. 
D)  distribution effect.

Question 12

Suppose a consumer really likes rutabagas and likes broccoli fairly well.Suppose the prices of both goods are $0.60 per pound and that the consumer is maximizing utility.We can conclude that:

Accepted Answer

A)  the marginal utilities of both goods are the same. 
B)  the marginal utility of rutabagas is greater than the marginal utility of broccoli. 
C)  the marginal utility of broccoli is greater than the marginal utility of rutabagas. 
D)  the marginal utility of both goods is zero. 
A)  the marginal utilities of both goods are the same. 
B)  the marginal utility of rutabagas is greater than the marginal utility of broccoli. 
C)  the marginal utility of broccoli is greater than the marginal utility of rutabagas. 
D)  the marginal utility of both goods is zero.

Question 13

As you consume more of good A relative to another good B, the _______ of good A eventually decreases.

Accepted Answer

A)  total utility 
B)  usefulness 
C)  marginal utility 
D)  demand 
A)  total utility 
B)  usefulness 
C)  marginal utility 
D)  demand

Question 14

When the price of an inferior good falls:

Accepted Answer

A)  the substitution effect will cause the quantity demanded to decrease. 
B)  the substitution effect will cause the quantity demanded to increase. 
C)  the income effect will cause the quantity demanded to decrease. 
D)  both B and C will occur. 
A)  the substitution effect will cause the quantity demanded to decrease. 
B)  the substitution effect will cause the quantity demanded to increase. 
C)  the income effect will cause the quantity demanded to decrease. 
D)  both B and C will occur.

Question 15

An imaginary adjustment of a consumer's income at the same instant a price changes, so the consumer has just enough to buy the same goods and services at the new price is:

Accepted Answer

A)  the substitution effect. 
B)  the income effect. 
C)  an income-compensated price change. 
D)  a price-compensated utility change. 
A)  the substitution effect. 
B)  the income effect. 
C)  an income-compensated price change. 
D)  a price-compensated utility change.

Question 16

Demand for a normal good _______ with _______ in income.

Accepted Answer

A)  rises; decreases 
B)  falls; increases 
C)  rises; increases 
D)  stays the same; increases 
A)  rises; decreases 
B)  falls; increases 
C)  rises; increases 
D)  stays the same; increases

Question 17

Use the following to answer question(s): Consumer Equilibrium 3
  
-(Exhibit: Consumer Equilibrium 3) An unattainable level of utility, given budget constraint FL, is at point:

Accepted Answer

A)  G. 
B)  H. 
C)  I. 
D)  J. 
A)  G. 
B)  H. 
C)  I. 
D)  J.

Question 18

According to the income effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:

Accepted Answer

A)  have an implicit reduction in income. 
B)  have an implicit increase in income. 
C)  purchase fewer substitute goods. 
D)  purchase more substitute goods. 
A)  have an implicit reduction in income. 
B)  have an implicit increase in income. 
C)  purchase fewer substitute goods. 
D)  purchase more substitute goods.

Question 19

If total utility increases from 10 to 15 for the second unit of a good consumed, the marginal utility of the second unit is 15.

Accepted Answer

A) True 
 B)False

Question 20

If a consumer purchases a combination of commodities x and y such that MUₓ/Pₓ = 30 and MUᵧ/Pᵧ = 40, to maximize utility, the consumers should buy.

Accepted Answer

A)  less of x and more of y. 
B)  more of x and less of y. 
C)  more of both x and y. 
D)  less of both x and y. 
A)  less of x and more of y. 
B)  more of x and less of y. 
C)  more of both x and y. 
D)  less of both x and y.

Each point along an indifference curve represents a different amount of total utility for a consumer.

Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively.The total utility for the first unit is:

In the Case in Point on P.O.W.camps, the point was made that:

The law of diminishing marginal utility exists for the first three units of a good if they have total utilities of:

A line representing all the possible combinations of two commodities that a consumer can purchase at a particular time, given the market prices of the commodities and the consumer's income, is a(n):

Use the following to answer question(s): Consumer Equilibrium 3 -(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point K.Given budget constraint FL, utility can be increased by moving to point:

Which of the following is (are) true?

Use the following to answer question(s): -(Exhibit: Utility) Marginal utility first becomes negative at the _______ unit.

Utility maximization for all goods requires that:

The textbook states that the law of demand:

You decide to increase the quantity of pizza purchased each month when the price decreases in part because the lower price causes an implicit increase in your income.This is an indication of the:

Suppose a consumer really likes rutabagas and likes broccoli fairly well.Suppose the prices of both goods are $0.60 per pound and that the consumer is maximizing utility.We can conclude that:

As you consume more of good A relative to another good B, the _______ of good A eventually decreases.

When the price of an inferior good falls:

An imaginary adjustment of a consumer's income at the same instant a price changes, so the consumer has just enough to buy the same goods and services at the new price is:

Demand for a normal good _ with _ in income.

Use the following to answer question(s): Consumer Equilibrium 3 -(Exhibit: Consumer Equilibrium 3) An unattainable level of utility, given budget constraint FL, is at point:

According to the income effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:

If total utility increases from 10 to 15 for the second unit of a good consumed, the marginal utility of the second unit is 15.

If a consumer purchases a combination of commodities x and y such that MUₓ/Pₓ = 30 and MUᵧ/Pᵧ = 40, to maximize utility, the consumers should buy.

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 7: The Analysis of Consumer Choice

Each point along an indifference curve represents a different amount of total utility for a consumer.

Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively.The total utility for the first unit is:

In the Case in Point on P.O.W.camps, the point was made that:

The law of diminishing marginal utility exists for the first three units of a good if they have total utilities of:

A line representing all the possible combinations of two commodities that a consumer can purchase at a particular time, given the market prices of the commodities and the consumer's income, is a(n):

Use the following to answer question(s): Consumer Equilibrium 3 -(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point K.Given budget constraint FL, utility can be increased by moving to point:

Which of the following is (are) true?

Use the following to answer question(s): -(Exhibit: Utility) Marginal utility first becomes negative at the _______ unit.

Utility maximization for all goods requires that:

The textbook states that the law of demand:

You decide to increase the quantity of pizza purchased each month when the price decreases in part because the lower price causes an implicit increase in your income.This is an indication of the:

Suppose a consumer really likes rutabagas and likes broccoli fairly well.Suppose the prices of both goods are $0.60 per pound and that the consumer is maximizing utility.We can conclude that:

As you consume more of good A relative to another good B, the _______ of good A eventually decreases.

When the price of an inferior good falls:

An imaginary adjustment of a consumer's income at the same instant a price changes, so the consumer has just enough to buy the same goods and services at the new price is:

Demand for a normal good _______ with _______ in income.

Use the following to answer question(s): Consumer Equilibrium 3 -(Exhibit: Consumer Equilibrium 3) An unattainable level of utility, given budget constraint FL, is at point:

According to the income effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:

If total utility increases from 10 to 15 for the second unit of a good consumed, the marginal utility of the second unit is 15.

If a consumer purchases a combination of commodities x and y such that MUₓ/Pₓ = 30 and MUᵧ/Pᵧ = 40, to maximize utility, the consumers should buy.

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Demand for a normal good _ with _ in income.