Question 1

A change in price results in a(n)________ of the budget constraint line.

Accepted Answer

A)  rotation 
B)  shift 
C)  stretch 
D)  narrowing 
E)  widening 
A)  rotation 
B)  shift 
C)  stretch 
D)  narrowing 
E)  widening

Question 2

A big concern with trying to measure utility is that

Accepted Answer

A)  individuals cannot place utility values on different goods and services. 
B)  it is difficult to measure marginal utility. 
C)  there is no distinction between utility for goods and utility for services. 
D)  to measure utility,you need monetary values of the goods and services. 
E)  each individual has a unique personal scale for his or her utility measures. 
A)  individuals cannot place utility values on different goods and services. 
B)  it is difficult to measure marginal utility. 
C)  there is no distinction between utility for goods and utility for services. 
D)  to measure utility,you need monetary values of the goods and services. 
E)  each individual has a unique personal scale for his or her utility measures.

Question 3

Why is the preferred path to the highest utility one in which both items are economic "goods"?

Accepted Answer

A)  Since indifference curves are not thick,there is only one path to the highest utility. 
B)  "Goods" produce an upward-sloping curve and is the only way up to the maximization point. 
C)  "Goods" reduce economic "bads" and permit movement to the maximization point from all four directions. 
D)  People are unlikely to willingly pay in order to feel worse. 
E)  The combination of "goods" produces both an upward- and a downward-sloping curve that converge at the maximization point. 
A)  Since indifference curves are not thick,there is only one path to the highest utility. 
B)  "Goods" produce an upward-sloping curve and is the only way up to the maximization point. 
C)  "Goods" reduce economic "bads" and permit movement to the maximization point from all four directions. 
D)  People are unlikely to willingly pay in order to feel worse. 
E)  The combination of "goods" produces both an upward- and a downward-sloping curve that converge at the maximization point.

Question 4

Why are indifference curves typically bowed inward?

Accepted Answer

Diminishing marginal utility tells us th

Question 5

The substitution effect

Accepted Answer

A)  occurs when 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 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 6

The combination of Good X and Good Y that will maximize your utility will have which of the following properties?

Accepted Answer

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

Question 7

Which of the following statements is true about utility?

Accepted Answer

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

Question 8

Refer to the following figure to answer the following questions:
  
-Total utility after the second cupcake is

Accepted Answer

A)  30 utils. 
B)  25 utils. 
C)  55 utils. 
D)  5 utils. 
E)  50 utils. 
A)  30 utils. 
B)  25 utils. 
C)  55 utils. 
D)  5 utils. 
E)  50 utils.

Question 9

Refer to the following indifference curve.The marginal rate of substitution (MRS)between points A and B is

Accepted Answer

A)  -1 
B)  -2 
C)  -1/2 
D)  1/2 
E)  1 
A)  -1 
B)  -2 
C)  -1/2 
D)  1/2 
E)  1

Question 10

Refer to the following table to answer the following questions:
  
-If the price of attending a soccer game changes from $25 to $20,the marginal utility per dollar spent for the fifth game changes from

Accepted Answer

A)  2.50 to 2.00. 
B)  3.00 to 3.75 
C)  3.75 to 3.00. 
D)  2.00 to 2.50. 
E)  20 to 25. 
A)  2.50 to 2.00. 
B)  3.00 to 3.75 
C)  3.75 to 3.00. 
D)  2.00 to 2.50. 
E)  20 to 25.

Question 11

Bryce is at the local grocery store,shopping for himself and his girlfriend Renee.This week,chicken breasts are on sale for 45 percent off the regular price.What two effects does Bryce face that may cause him to purchase more chicken breasts this week than he did last week?

Accepted Answer

The two effects that Bryce faces with th

Question 12

If a combination of items exists to the right of the budget constraint line,the consumer

Accepted Answer

A)  must consume less of one item in order to afford. 
B)  cannot afford. 
C)  must increase the variety of items in the combination. 
D)  must decrease the variety of items in the combination. 
E)  will be able to afford sometime in the future. 
A)  must consume less of one item in order to afford. 
B)  cannot afford. 
C)  must increase the variety of items in the combination. 
D)  must decrease the variety of items in the combination. 
E)  will be able to afford sometime in the future.

Question 13

Graphing only a change in price for a good does not distinguish the contribution of the ________ from the ________.

Accepted Answer

A)  substitution effect; real-income effect 
B)  perfect substitute; perfect complement 
C)  indifference curve; maximization point 
D)  rotation; shift 
E)  consumer optimum; marginal rate of substitution 
A)  substitution effect; real-income effect 
B)  perfect substitute; perfect complement 
C)  indifference curve; maximization point 
D)  rotation; shift 
E)  consumer optimum; marginal rate of substitution

Question 14

After reading the nutritional label on the box of his favorite cookies,Ernesto was shocked to discover the high sugar content.As a result,cookies don't bring him the same satisfaction anymore,falling from 25 utils to 12 utils.Benefiting from more efficient machinery,Ernesto's favorite cookie manufacturer also lowered the price per box.What happens to Ernesto's marginal utility per dollar spent?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It stays the same. 
D)  The rate of change decreases. 
E)  There is not enough information to determine. 
A)  It increases. 
B)  It decreases. 
C)  It stays the same. 
D)  The rate of change decreases. 
E)  There is not enough information to determine.

Question 15

Individuals who haven't studied economics may not understand how all-you-can-eat buffets manage to make money.This can be explained by the concept of ________,which makes each trip to the buffet line less satisfactory than the previous one.

Accepted Answer

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

Question 16

Kati-Lyn has to choose between eating Chinese food and Indian food.Both Chinese food and Indian food cost the same.Which of the following equations,where MU is marginal utility and U is total utility,will lead to the optimal level of consumption?

Accepted Answer

A)  MUChinese Indian 
B)  MUChinese >MUIndian 
C)  MUChinese = MUIndian 
D)  UChinese = UIndian 
E)  UChinese >UIndian 
A)  MUChinese Indian 
B)  MUChinese >MUIndian 
C)  MUChinese = MUIndian 
D)  UChinese = UIndian 
E)  UChinese >UIndian

Question 17

Refer to the following table to answer the following questions:
  
-Assume that strawberries cost $1 and apples cost $2.If the consumer has $16,the bundle of goods that would maximize her utility per dollar leads to a utility equal to ________ utils.

Accepted Answer

A)  48 
B)  84 
C)  77 
D)  66 
E)  46 
A)  48 
B)  84 
C)  77 
D)  66 
E)  46

Question 18

The maximization point is the location at which an indifference curve and the budget constraint line

Accepted Answer

A)  parallel each other. 
B)  completely overlap. 
C)  are tangent to one another. 
D)  are secant to one another. 
E)  intersect a second indifference curve. 
A)  parallel each other. 
B)  completely overlap. 
C)  are tangent to one another. 
D)  are secant to one another. 
E)  intersect a second indifference curve.

Question 19

Refer to the following figure to answer the following questions:
  
-The marginal utility experienced from consuming the sixth taco is

Accepted Answer

A)  35 utils. 
B)  0 utils. 
C)  27 utils. 
D)  -12 utils. 
E)  -3 utils. 
A)  35 utils. 
B)  0 utils. 
C)  27 utils. 
D)  -12 utils. 
E)  -3 utils.

Question 20

Eating a steak gives Greta satisfaction equal to 55 utils,whereas eating a hamburger gives her a satisfaction of 25 utils.Greta should

Accepted Answer

A)  always choose to eat steak over hamburger. 
B)  always choose to eat hamburger over steak. 
C)  eat steak only if it is cheaper than hamburger. 
D)  eat hamburger only if she has recently eaten steak. 
E)  eat hamburger only if it is cheaper per util than steak. 
A)  always choose to eat steak over hamburger. 
B)  always choose to eat hamburger over steak. 
C)  eat steak only if it is cheaper than hamburger. 
D)  eat hamburger only if she has recently eaten steak. 
E)  eat hamburger only if it is cheaper per util than steak.

A change in price results in a(n)________ of the budget constraint line.

A big concern with trying to measure utility is that

Why is the preferred path to the highest utility one in which both items are economic "goods"?

Why are indifference curves typically bowed inward?

The substitution effect

The combination of Good X and Good Y that will maximize your utility will have which of the following properties?

Which of the following statements is true about utility?

Refer to the following figure to answer the following questions: -Total utility after the second cupcake is

Refer to the following indifference curve.The marginal rate of substitution (MRS)between points A and B is

Refer to the following table to answer the following questions: -If the price of attending a soccer game changes from $25 to $20,the marginal utility per dollar spent for the fifth game changes from

Bryce is at the local grocery store,shopping for himself and his girlfriend Renee.This week,chicken breasts are on sale for 45 percent off the regular price.What two effects does Bryce face that may cause him to purchase more chicken breasts this week than he did last week?

If a combination of items exists to the right of the budget constraint line,the consumer

Graphing only a change in price for a good does not distinguish the contribution of the from the .

Individuals who haven't studied economics may not understand how all-you-can-eat buffets manage to make money.This can be explained by the concept of ________,which makes each trip to the buffet line less satisfactory than the previous one.

Kati-Lyn has to choose between eating Chinese food and Indian food.Both Chinese food and Indian food cost the same.Which of the following equations,where MU is marginal utility and U is total utility,will lead to the optimal level of consumption?

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.If the consumer has $16,the bundle of goods that would maximize her utility per dollar leads to a utility equal to ________ utils.

The maximization point is the location at which an indifference curve and the budget constraint line

Refer to the following figure to answer the following questions: -The marginal utility experienced from consuming the sixth taco is

Eating a steak gives Greta satisfaction equal to 55 utils,whereas eating a hamburger gives her a satisfaction of 25 utils.Greta should

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

A change in price results in a(n)________ of the budget constraint line.

A big concern with trying to measure utility is that

Why is the preferred path to the highest utility one in which both items are economic "goods"?

Why are indifference curves typically bowed inward?

The substitution effect

The combination of Good X and Good Y that will maximize your utility will have which of the following properties?

Which of the following statements is true about utility?

Refer to the following figure to answer the following questions: -Total utility after the second cupcake is

Refer to the following indifference curve.The marginal rate of substitution (MRS)between points A and B is

Refer to the following table to answer the following questions: -If the price of attending a soccer game changes from $25 to $20,the marginal utility per dollar spent for the fifth game changes from

Bryce is at the local grocery store,shopping for himself and his girlfriend Renee.This week,chicken breasts are on sale for 45 percent off the regular price.What two effects does Bryce face that may cause him to purchase more chicken breasts this week than he did last week?

If a combination of items exists to the right of the budget constraint line,the consumer

Graphing only a change in price for a good does not distinguish the contribution of the ________ from the ________.

Individuals who haven't studied economics may not understand how all-you-can-eat buffets manage to make money.This can be explained by the concept of ________,which makes each trip to the buffet line less satisfactory than the previous one.

Kati-Lyn has to choose between eating Chinese food and Indian food.Both Chinese food and Indian food cost the same.Which of the following equations,where MU is marginal utility and U is total utility,will lead to the optimal level of consumption?

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.If the consumer has $16,the bundle of goods that would maximize her utility per dollar leads to a utility equal to ________ utils.

The maximization point is the location at which an indifference curve and the budget constraint line

Refer to the following figure to answer the following questions: -The marginal utility experienced from consuming the sixth taco is

Eating a steak gives Greta satisfaction equal to 55 utils,whereas eating a hamburger gives her a satisfaction of 25 utils.Greta should

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

Graphing only a change in price for a good does not distinguish the contribution of the from the .