Question 1

What are the two exceptions to convex indifference curves?

Accepted Answer

A)  imperfect substitutes and imperfect complements 
B)  perfect substitutes and perfect complements 
C)  imperfect substitutes and perfect complements 
D)  perfect substitutes and imperfect complements 
E)  There are no exceptions to convex indifference curves. 
A)  imperfect substitutes and imperfect complements 
B)  perfect substitutes and perfect complements 
C)  imperfect substitutes and perfect complements 
D)  perfect substitutes and imperfect complements 
E)  There are no exceptions to convex indifference curves.

Question 2

When a consumer buys more of a good as a result of a relative price change,economists call it

Accepted Answer

A)  diminishing marginal utility. 
B)  the substitution effect. 
C)  marginal utility. 
D)  the real-income effect. 
E)  the consumer optimum. 
A)  diminishing marginal utility. 
B)  the substitution effect. 
C)  marginal utility. 
D)  the real-income effect. 
E)  the consumer optimum.

Question 3

Which of the following statements is true about utility?

Accepted Answer

A)  Economists measure utility with a unit they refer to as a util. 
B)  Utility is easy to measure across individuals. 
C)  All products produce the same level of utility. 
D)  Everyone receives the same level of satisfaction from the same good or service. 
E)  Economists measure utility with a unit they refer to as an utte. 
A)  Economists measure utility with a unit they refer to as a util. 
B)  Utility is easy to measure across individuals. 
C)  All products produce the same level of utility. 
D)  Everyone receives the same level of satisfaction from the same good or service. 
E)  Economists measure utility with a unit they refer to as an utte.

Question 4

Utility theory seeks to measure

Accepted Answer

A)  supply. 
B)  costs. 
C)  ability. 
D)  profits. 
E)  satisfaction. 
A)  supply. 
B)  costs. 
C)  ability. 
D)  profits. 
E)  satisfaction.

Question 5

A friend of Dylan's is operating a concession stand for a youth sporting league and wants Dylan's advice on pricing.He plans to sell popcorn for $4,but is unsure of the price to charge for peanuts.Popcorn provides Dylan with 36 utils,while peanuts provide 27 utils.Dylan offers his personal preference as a suggestion,so what is the maximum price Dylan is willing to pay for peanuts?

Accepted Answer

A)  $9 
B)  $7 
C)  $4 
D)  $3 
E)  $1.50 
A)  $9 
B)  $7 
C)  $4 
D)  $3 
E)  $1.50

Question 6

The ________ line,and the area underneath,contain all of the possible combinations that a consumer can afford.

Accepted Answer

A)  indifference 
B)  Maginot 
C)  optimization 
D)  redaction 
E)  budget constraint 
A)  indifference 
B)  Maginot 
C)  optimization 
D)  redaction 
E)  budget constraint

Question 7

When there is a change in purchasing power as a result of a change in the price of a good,economists call it

Accepted Answer

A)  the real-income effect. 
B)  the substitution effect. 
C)  marginal utility. 
D)  diminishing marginal utility. 
E)  the consumer optimum. 
A)  the real-income effect. 
B)  the substitution effect. 
C)  marginal utility. 
D)  diminishing marginal utility. 
E)  the consumer optimum.

Question 8

Refer to the following figure to answer the following questions:
  
-The product's marginal utility in dollars is equal to

Accepted Answer

A)  $250. 
B)  $500. 
C)  $150. 
D)  $15. 
E)  $20. 
A)  $250. 
B)  $500. 
C)  $150. 
D)  $15. 
E)  $20.

Question 9

Refer to the following table:    
a.This consumer experiences diminishing marginal utility after how many days of camping?
 
b.What is the total utility this consumer experiences after three days of camping? After eight days?

Accepted Answer

a.The consumer experiences diminishing m

Question 10

In producing a budget constraint line for combinations of staples and paper clips,which are sold by the box,a student labels the points (0,5)and (10,0)along the line.Staples occupy the vertical axis,while paper clips are situated on the horizontal axis.Therefore,boxes of

Accepted Answer

A)  staples cost twice as much as boxes of paper clips. 
B)  paper clips cost twice as much as boxes of staples. 
C)  staples cost $10. 
D)  paper clips cost $5. 
E)  staples cost the same as boxes of paper clips. 
A)  staples cost twice as much as boxes of paper clips. 
B)  paper clips cost twice as much as boxes of staples. 
C)  staples cost $10. 
D)  paper clips cost $5. 
E)  staples cost the same as boxes of paper clips.

Question 11

Emilia is trying to figure out what combination of bags of peanuts and bags of popcorn she should buy with her $13 budget.The price of peanuts is currently $3 per bag and the price of popcorn is currently $2 per bag.Emilia is currently deciding whether to purchase one more bag of peanuts or one more bag of popcorn.She should choose the

Accepted Answer

A)  peanuts every time. 
B)  popcorn every time. 
C)  peanuts,if the marginal utility of peanuts is greater than popcorn. 
D)  popcorn,if the marginal utility of popcorn is greater than peanuts. 
E)  peanuts,if the last bag she consumed was popcorn,and vice versa. 
A)  peanuts every time. 
B)  popcorn every time. 
C)  peanuts,if the marginal utility of peanuts is greater than popcorn. 
D)  popcorn,if the marginal utility of popcorn is greater than peanuts. 
E)  peanuts,if the last bag she consumed was popcorn,and vice versa.

Question 12

Refer to the following table:
   
a.What is the marginal utility of the third iced tea?
b.When does this consumer experience diminishing marginal utility?
c.When does this consumer experience negative marginal utility?

Accepted Answer

a.The marginal utility of the third iced

Question 13

Each point along an indifference curve indicates a combination at which a consumer does not have a preference.Two divergent indifference curves can produce at least two points where there are distinct preferences.Therefore,indifference curves CANNOT

Accepted Answer

A)  trend toward zero. 
B)  bisect either axes. 
C)  be parallel to one another. 
D)  trend toward infinity. 
E)  intersect one another. 
A)  trend toward zero. 
B)  bisect either axes. 
C)  be parallel to one another. 
D)  trend toward infinity. 
E)  intersect one another.

Question 14

Refer to the following table to answer the following questions:
  
-Assume that strawberries cost $1 and apples cost $2.If a consumer has $16,the bundle of goods that would maximize his utility per dollar and remain within his budget would be

Accepted Answer

A)  2 strawberries and 7 apples. 
B)  6 strawberries and 5 apples. 
C)  4 strawberries and 6 apples. 
D)  4 strawberries and 2 apples. 
E)  7 strawberries and 7 apples. 
A)  2 strawberries and 7 apples. 
B)  6 strawberries and 5 apples. 
C)  4 strawberries and 6 apples. 
D)  4 strawberries and 2 apples. 
E)  7 strawberries and 7 apples.

Question 15

When does a change in price produce a real-income effect?

Accepted Answer

A)  only if purchasing power is impacted significantly 
B)  only if purchasing power is impacted negatively 
C)  only if there is a substitution effect 
D)  only if there is an optimum effect 
E)  always 
A)  only if purchasing power is impacted significantly 
B)  only if purchasing power is impacted negatively 
C)  only if there is a substitution effect 
D)  only if there is an optimum effect 
E)  always

Question 16

According to the following figure,the movement from point (4,3)to point A is a function of ________,while the subsequent movement from point A to point (2,3)results from ________.

Accepted Answer

A)  an increase in the price of pizza; a decrease in the price of Pepsi 
B)  a decrease in the price of pizza; an increase in the price of Pepsi 
C)  a combination of the substitution and real-income effects; a decrease in the price of pizza 
D)  the substitution effect alone; the real-income effect alone 
E)  the real-income effect alone; the substitution effect alone 
A)  an increase in the price of pizza; a decrease in the price of Pepsi 
B)  a decrease in the price of pizza; an increase in the price of Pepsi 
C)  a combination of the substitution and real-income effects; a decrease in the price of pizza 
D)  the substitution effect alone; the real-income effect alone 
E)  the real-income effect alone; the substitution effect alone

Question 17

Lower 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 18

Consuming past the maximization point produces a(n)________ marginal utility.

Accepted Answer

A)  indifferent 
B)  positive 
C)  negative 
D)  equal 
E)  increasing 
A)  indifferent 
B)  positive 
C)  negative 
D)  equal 
E)  increasing

Question 19

Refer to the following table to answer the following questions:
  
-Assume that strawberries cost $1 and apples cost $2.If a consumer has $8,the bundle of goods that would maximize her utility per dollar and remain within her budget would be

Accepted Answer

A)  0 strawberries and 4 apples. 
B)  6 strawberries and 5 apples. 
C)  6 strawberries and 1 apple. 
D)  4 strawberries and 2 apples. 
E)  2 strawberries and 3 apples. 
A)  0 strawberries and 4 apples. 
B)  6 strawberries and 5 apples. 
C)  6 strawberries and 1 apple. 
D)  4 strawberries and 2 apples. 
E)  2 strawberries and 3 apples.

Question 20

The fact that water,which is essential to life,is inexpensive,whereas diamonds,which do not sustain life,are expensive can be explained by the

Accepted Answer

A)  law of diminishing marginal utility. 
B)  diamond-water paradox. 
C)  diamond-water theory. 
D)  diamond-water comparison. 
E)  law of demand. 
A)  law of diminishing marginal utility. 
B)  diamond-water paradox. 
C)  diamond-water theory. 
D)  diamond-water comparison. 
E)  law of demand.

What are the two exceptions to convex indifference curves?

When a consumer buys more of a good as a result of a relative price change,economists call it

Which of the following statements is true about utility?

Utility theory seeks to measure

The ________ line,and the area underneath,contain all of the possible combinations that a consumer can afford.

When there is a change in purchasing power as a result of a change in the price of a good,economists call it

Refer to the following figure to answer the following questions: -The product's marginal utility in dollars is equal to

Refer to the following table: a.This consumer experiences diminishing marginal utility after how many days of camping? b.What is the total utility this consumer experiences after three days of camping? After eight days?

In producing a budget constraint line for combinations of staples and paper clips,which are sold by the box,a student labels the points (0,5)and (10,0)along the line.Staples occupy the vertical axis,while paper clips are situated on the horizontal axis.Therefore,boxes of

Refer to the following table: a.What is the marginal utility of the third iced tea? b.When does this consumer experience diminishing marginal utility? c.When does this consumer experience negative marginal utility?

Each point along an indifference curve indicates a combination at which a consumer does not have a preference.Two divergent indifference curves can produce at least two points where there are distinct preferences.Therefore,indifference curves CANNOT

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.If a consumer has $16,the bundle of goods that would maximize his utility per dollar and remain within his budget would be

When does a change in price produce a real-income effect?

According to the following figure,the movement from point (4,3)to point A is a function of ,while the subsequent movement from point A to point (2,3)results from .

Lower prices

Consuming past the maximization point produces a(n)________ marginal utility.

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.If a consumer has $8,the bundle of goods that would maximize her utility per dollar and remain within her budget would be

The fact that water,which is essential to life,is inexpensive,whereas diamonds,which do not sustain life,are expensive can be explained by the

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

What are the two exceptions to convex indifference curves?

When a consumer buys more of a good as a result of a relative price change,economists call it

Which of the following statements is true about utility?

Utility theory seeks to measure

The ________ line,and the area underneath,contain all of the possible combinations that a consumer can afford.

When there is a change in purchasing power as a result of a change in the price of a good,economists call it

Refer to the following figure to answer the following questions: -The product's marginal utility in dollars is equal to

Refer to the following table: a.This consumer experiences diminishing marginal utility after how many days of camping? b.What is the total utility this consumer experiences after three days of camping? After eight days?

In producing a budget constraint line for combinations of staples and paper clips,which are sold by the box,a student labels the points (0,5)and (10,0)along the line.Staples occupy the vertical axis,while paper clips are situated on the horizontal axis.Therefore,boxes of

Refer to the following table: a.What is the marginal utility of the third iced tea? b.When does this consumer experience diminishing marginal utility? c.When does this consumer experience negative marginal utility?

Each point along an indifference curve indicates a combination at which a consumer does not have a preference.Two divergent indifference curves can produce at least two points where there are distinct preferences.Therefore,indifference curves CANNOT

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.If a consumer has $16,the bundle of goods that would maximize his utility per dollar and remain within his budget would be

When does a change in price produce a real-income effect?

According to the following figure,the movement from point (4,3)to point A is a function of ________,while the subsequent movement from point A to point (2,3)results from ________.

Lower prices

Consuming past the maximization point produces a(n)________ marginal utility.

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.If a consumer has $8,the bundle of goods that would maximize her utility per dollar and remain within her budget would be

The fact that water,which is essential to life,is inexpensive,whereas diamonds,which do not sustain life,are expensive can be explained by the

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

According to the following figure,the movement from point (4,3)to point A is a function of ,while the subsequent movement from point A to point (2,3)results from .