Question 1

When given the marginal utility of the first five units of a product,we can calculate the total utility by

Accepted Answer

A)  finding the difference between the fourth and fifth units. 
B)  finding the difference between the first and fifth units. 
C)  looking at the marginal utility of the fifth unit. 
D)  adding the fourth and fifth units. 
E)  adding the marginal utilities of the first five units. 
A)  finding the difference between the fourth and fifth units. 
B)  finding the difference between the first and fifth units. 
C)  looking at the marginal utility of the fifth unit. 
D)  adding the fourth and fifth units. 
E)  adding the marginal utilities of the first five units.

Question 2

Refer to the following figure to answer the following questions:
  
-This consumer experiences diminishing marginal utility

Accepted Answer

A)  over all levels of consumption. 
B)  up until she consumes her fifth taco. 
C)  up until she consumes her sixth taco. 
D)  from her sixth taco on. 
E)  for her fifth and sixth tacos only. 
A)  over all levels of consumption. 
B)  up until she consumes her fifth taco. 
C)  up until she consumes her sixth taco. 
D)  from her sixth taco on. 
E)  for her fifth and sixth tacos only.

Question 3

Explain the similarities and differences between maximizing your utility over two goods and maximizing your utility over more than two goods.

Accepted Answer

The only difference between maximizing y

Question 4

The diamond-water paradox unfairly compares the

Accepted Answer

A)  amount of marginal utility a person receives from a small quantity of something rare with the total utility from a small quantity of something after already consuming a large amount. 
B)  amount of total utility a person receives from a small quantity of something rare with the marginal utility from a small quantity of something after already consuming a large amount. 
C)  amount of marginal utility a person receives from a small quantity of something rare with the marginal utility from a small quantity of something after already consuming a large amount. 
D)  price of water with the price of diamonds. 
E)  law of demand with the prices of water and diamonds. 
A)  amount of marginal utility a person receives from a small quantity of something rare with the total utility from a small quantity of something after already consuming a large amount. 
B)  amount of total utility a person receives from a small quantity of something rare with the marginal utility from a small quantity of something after already consuming a large amount. 
C)  amount of marginal utility a person receives from a small quantity of something rare with the marginal utility from a small quantity of something after already consuming a large amount. 
D)  price of water with the price of diamonds. 
E)  law of demand with the prices of water and diamonds.

Question 5

The slope of the indifference curve for perfect substitutes

Accepted Answer

A)  is either positive or 0. 
B)  is always positive. 
C)  is always negative. 
D)  varies based on the marginal rate of substitution. 
E)  varies based on the marginal rate of utility. 
A)  is either positive or 0. 
B)  is always positive. 
C)  is always negative. 
D)  varies based on the marginal rate of substitution. 
E)  varies based on the marginal rate of utility.

Question 6

When does an increase in price produce a substitution effect?

Accepted Answer

A)  only if purchasing power is impacted significantly 
B)  only if there is a real-income effect 
C)  only if marginal utility per dollar decreases relative to another good 
D)  only if marginal utility per dollar increases relative to another good 
E)  always 
A)  only if purchasing power is impacted significantly 
B)  only if there is a real-income effect 
C)  only if marginal utility per dollar decreases relative to another good 
D)  only if marginal utility per dollar increases relative to another good 
E)  always

Question 7

Explain why the following indifference curve cannot exist:

Accepted Answer

One key property of indifference curves

Question 8

When making purchase decisions over the course of a year,a consumer adheres to which of the following relationships?

Accepted Answer

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

Question 9

Refer to the following table to answer the following questions:
  
-If the purchase of 5 strawberries and 5 apples maximizes your utility per dollar,the price of strawberries must be ________ if the price of apples is $3.00.

Accepted Answer

A)  $1.00 
B)  $2.00 
C)  $1.50 
D)  $2.50 
E)  $3.00 
A)  $1.00 
B)  $2.00 
C)  $1.50 
D)  $2.50 
E)  $3.00

Question 10

Higher prices

Accepted Answer

A)  lower the marginal utility per dollar spent and cause consumers to buy less of a good. 
B)  increase the marginal utility per dollar spent and cause consumers to buy less of a good. 
C)  do not change the marginal utility per dollar. 
D)  lower the marginal utility per dollar spent and cause consumers to buy more of a good. 
E)  increase the marginal utility per dollar spent and cause consumers to buy more of a good. 
A)  lower the marginal utility per dollar spent and cause consumers to buy less of a good. 
B)  increase the marginal utility per dollar spent and cause consumers to buy less of a good. 
C)  do not change the marginal utility per dollar. 
D)  lower the marginal utility per dollar spent and cause consumers to buy more of a good. 
E)  increase the marginal utility per dollar spent and cause consumers to buy more of a good.

Question 11

By using consumer choice theory,explain why diamonds,which are not necessary to sustain life,are expensive,whereas water,which is necessary for life,is not.

Accepted Answer

One would think that water,because it is

Question 12

Marginal utility

Accepted Answer

A)  occurs when total utility declines as consumption increases. 
B)  is the additional satisfaction derived from consuming one more unit of a good or service. 
C)  is the combination of goods and services that maximizes utility for a given income. 
D)  occurs when a consumer buys more of a good as a result of a relative price change. 
E)  occurs when there is a change in purchasing power as a result of a change in the price of a good. 
A)  occurs when total utility declines as consumption increases. 
B)  is the additional satisfaction derived from consuming one more unit of a good or service. 
C)  is the combination of goods and services that maximizes utility for a given income. 
D)  occurs when a consumer buys more of a good as a result of a relative price change. 
E)  occurs when there is a change in purchasing power as a result of a change in the price of a good.

Question 13

American consumers make thousands of purchasing decisions each year.These decisions

Accepted Answer

A)  involve several trade-offs. 
B)  are always consistent with economic theory. 
C)  do not depend on the consumers' budgets. 
D)  are called utils. 
E)  always maximize utility. 
A)  involve several trade-offs. 
B)  are always consistent with economic theory. 
C)  do not depend on the consumers' budgets. 
D)  are called utils. 
E)  always maximize utility.

Question 14

Indifference curves visually lead upward to a point called the ________ point.

Accepted Answer

A)  maximization 
B)  total utility 
C)  maximum utility 
D)  satisfaction 
E)  maximum consumption 
A)  maximization 
B)  total utility 
C)  maximum utility 
D)  satisfaction 
E)  maximum consumption

Question 15

The concept of diminishing marginal utility means that a graph representing total utility will be

Accepted Answer

A)  downward-sloping. 
B)  upward-sloping. 
C)  impossible to generalize without a data set. 
D)  downward-facing concave. 
E)  upward-facing concave. 
A)  downward-sloping. 
B)  upward-sloping. 
C)  impossible to generalize without a data set. 
D)  downward-facing concave. 
E)  upward-facing concave.

Question 16

Perfect substitutes produce an indifference curve with a(n)________ marginal rate of substitution.

Accepted Answer

A)  increasing 
B)  decreasing 
C)  inverse 
D)  constant 
E)  right-angle 
A)  increasing 
B)  decreasing 
C)  inverse 
D)  constant 
E)  right-angle

Question 17

A measure of the relative levels of satisfaction that consumers enjoy from the consumption of goods and services is called

Accepted Answer

A)  consumer optimum. 
B)  the real-income effect. 
C)  utility. 
D)  the substitution effect. 
E)  the diamond-water paradox. 
A)  consumer optimum. 
B)  the real-income effect. 
C)  utility. 
D)  the substitution effect. 
E)  the diamond-water paradox.

Question 18

The point at which a certain combination of two goods yields the most utility is the

Accepted Answer

A)  interference point. 
B)  indifference point. 
C)  balance point. 
D)  maximization point. 
E)  intersection curve. 
A)  interference point. 
B)  indifference point. 
C)  balance point. 
D)  maximization point. 
E)  intersection curve.

Question 19

For a consumer,which of the following statements about the real-income effect is true?

Accepted Answer

A)  It matters only when prices change enough to cause a measurable effect on the purchasing power of a consumer's income. 
B)  It can be observed for any price change. 
C)  It occurs when a consumer buys more of a good as a result of a relative price change. 
D)  It matters only when prices change enough to cause a consumer to purchase more of the good whose price changed. 
E)  The purchasing power of your income increases when the price of a good increases. 
A)  It matters only when prices change enough to cause a measurable effect on the purchasing power of a consumer's income. 
B)  It can be observed for any price change. 
C)  It occurs when a consumer buys more of a good as a result of a relative price change. 
D)  It matters only when prices change enough to cause a consumer to purchase more of the good whose price changed. 
E)  The purchasing power of your income increases when the price of a good increases.

Question 20

Diminishing marginal utility

Accepted Answer

A)  occurs when the additional utility for each good declines as consumption increases. 
B)  is the additional satisfaction derived from consuming one more unit of a good or service. 
C)  is the combination of goods and services that maximizes utility for a given income. 
D)  occurs when a consumer buys more of a good as a result of a relative price change. 
E)  occurs when there is a change in purchasing power as a result of a change in the price of a good. 
A)  occurs when the additional utility for each good declines as consumption increases. 
B)  is the additional satisfaction derived from consuming one more unit of a good or service. 
C)  is the combination of goods and services that maximizes utility for a given income. 
D)  occurs when a consumer buys more of a good as a result of a relative price change. 
E)  occurs when there is a change in purchasing power as a result of a change in the price of a good.

When given the marginal utility of the first five units of a product,we can calculate the total utility by

Refer to the following figure to answer the following questions: -This consumer experiences diminishing marginal utility

Explain the similarities and differences between maximizing your utility over two goods and maximizing your utility over more than two goods.

The diamond-water paradox unfairly compares the

The slope of the indifference curve for perfect substitutes

When does an increase in price produce a substitution effect?

Explain why the following indifference curve cannot exist:

When making purchase decisions over the course of a year,a consumer adheres to which of the following relationships?

Refer to the following table to answer the following questions: -If the purchase of 5 strawberries and 5 apples maximizes your utility per dollar,the price of strawberries must be ________ if the price of apples is $3.00.

Higher prices

By using consumer choice theory,explain why diamonds,which are not necessary to sustain life,are expensive,whereas water,which is necessary for life,is not.

Marginal utility

American consumers make thousands of purchasing decisions each year.These decisions

Indifference curves visually lead upward to a point called the ________ point.

The concept of diminishing marginal utility means that a graph representing total utility will be

Perfect substitutes produce an indifference curve with a(n)________ marginal rate of substitution.

A measure of the relative levels of satisfaction that consumers enjoy from the consumption of goods and services is called

The point at which a certain combination of two goods yields the most utility is the

For a consumer,which of the following statements about the real-income effect is true?

Diminishing marginal utility

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

Exam 16: Consumer Choice

When given the marginal utility of the first five units of a product,we can calculate the total utility by

Refer to the following figure to answer the following questions: -This consumer experiences diminishing marginal utility

Explain the similarities and differences between maximizing your utility over two goods and maximizing your utility over more than two goods.

The diamond-water paradox unfairly compares the

The slope of the indifference curve for perfect substitutes

When does an increase in price produce a substitution effect?

Explain why the following indifference curve cannot exist:

When making purchase decisions over the course of a year,a consumer adheres to which of the following relationships?

Refer to the following table to answer the following questions: -If the purchase of 5 strawberries and 5 apples maximizes your utility per dollar,the price of strawberries must be ________ if the price of apples is $3.00.

Higher prices

By using consumer choice theory,explain why diamonds,which are not necessary to sustain life,are expensive,whereas water,which is necessary for life,is not.

Marginal utility

American consumers make thousands of purchasing decisions each year.These decisions

Indifference curves visually lead upward to a point called the ________ point.

The concept of diminishing marginal utility means that a graph representing total utility will be

Perfect substitutes produce an indifference curve with a(n)________ marginal rate of substitution.

A measure of the relative levels of satisfaction that consumers enjoy from the consumption of goods and services is called

The point at which a certain combination of two goods yields the most utility is the

For a consumer,which of the following statements about the real-income effect is true?

Diminishing marginal utility

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters