Question 1

When you are maximizing your utility for product A,

Accepted Answer

A) marginal utility of A = 0. 
B) marginal utility of A = 1. 
C) marginal utility of A = price of 
D) None of these are true. 
A) marginal utility of A = 0. 
B) marginal utility of A = 1. 
C) marginal utility of A = price of 
D) None of these are true.

Question 2

Statement I: The water-diamond paradox is partially explained by the law of diminishing marginal utility.
Statement II: The marginal utility of the water we consume is quite low.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 3

-Assume the demand curve is line AD.If price is CB,then in the graph above,consumer surplus is bounded by

Accepted Answer

A) CAD. 
B) CBED. 
C) BAE. 
D) None of these are correct. 
A) CAD. 
B) CBED. 
C) BAE. 
D) None of these are correct.

Question 4

The concept based on the assumption that we get bargains on each unit we purchase until the last one is called

Accepted Answer

A) total utility. 
B) consumer surplus. 
C) marginal utility. 
D) the law of diminishing marginal utility. 
A) total utility. 
B) consumer surplus. 
C) marginal utility. 
D) the law of diminishing marginal utility.

Question 5

Table-Demand and Utility Table for action figures $$\begin{array} { | c | c | c | c | } 
\hline \text { Price } & \text { Quantity Demanded } & \text { Marginal Utility } & \text { Total Utility } \
\hline \$ 14 & 1 & & \
\hline \$ 12 & 2 & & \
\hline \$ 10 & 3 & & \
\hline \$ 8 & 4 & & \
\hline \$ 6 & 5 & & \
\hline
\end{array}$$
-If the price of action figures was $8.00 each,his consumer surplus would be

Accepted Answer

A) $8. 
B) $12. 
C) $16. 
D) $32. 
E) $44. 
A) $8. 
B) $12. 
C) $16. 
D) $32. 
E) $44.

Question 6

The additional utility from her purchase of a third pack of trading cards would be

Accepted Answer

A) $8. 
B) $9. 
C) $19. 
D) $27. 
E) None of the choices are true. 
A) $8. 
B) $9. 
C) $19. 
D) $27. 
E) None of the choices are true.

Question 7

The water-diamond paradox

Accepted Answer

A) occurs because goods essential to life such as water are cheap (and sometimes free). 
B) occurs because nonessential goods such as diamonds are rare and therefore very expensive. 
C) occurs because the price of a product is determined by its marginal utility,not its total utility. 
D) All of the choices are correct. 
A) occurs because goods essential to life such as water are cheap (and sometimes free). 
B) occurs because nonessential goods such as diamonds are rare and therefore very expensive. 
C) occurs because the price of a product is determined by its marginal utility,not its total utility. 
D) All of the choices are correct.

Question 8

We will keep buying digital music downloads from the Internet until the marginal utility of the music downloads

Accepted Answer

A) rises to the price of the download. 
B) falls to the price of the download. 
C) is greater than the price of the download. 
D) is less than the price of the downloaD. 
A) rises to the price of the download. 
B) falls to the price of the download. 
C) is greater than the price of the download. 
D) is less than the price of the downloaD.

Question 9

-Given the demand curve in this graph,if this product or service were free,how much consumer surplus would the individual receive?

Accepted Answer

A) $0 
B) $1.50 
C) $5.00 
D) $10.50 
A) $0 
B) $1.50 
C) $5.00 
D) $10.50

Question 10

Jason's cooking is so terrible that Melissa says she will have to be paid in order to even try it.Thus,her marginal utility for Jason's cooking is

Accepted Answer

A) constant. 
B) increasing. 
C) positive. 
D) negative. 
A) constant. 
B) increasing. 
C) positive. 
D) negative.

Question 11

-Assume the demand curve is line AD.If price is OF,the consumer surplus is bounded by letters

Accepted Answer

A) OAFB. 
B) OACE. 
C) OAD. 
D) ECD. 
E) FBD. 
A) OAFB. 
B) OACE. 
C) OAD. 
D) ECD. 
E) FBD.

Question 12

Statement I: The marginal utility of diamonds we purchase is quite high.
Statement II: The marginal utility of water we consume is quite high.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Exam 19: Theory of Consumer Behavior

When you are maximizing your utility for product A,

Statement I: The water-diamond paradox is partially explained by the law of diminishing marginal utility. Statement II: The marginal utility of the water we consume is quite low.

-Assume the demand curve is line AD.If price is CB,then in the graph above,consumer surplus is bounded by

The concept based on the assumption that we get bargains on each unit we purchase until the last one is called

Table-Demand and Utility Table for action figures Price Quantity Demanded Marginal Utility Total Utility \ 14 1 \ 12 2 \ 10 3 \ 8 4 \ 6 5 -If the price of action figures was $8.00 each,his consumer surplus would be

The additional utility from her purchase of a third pack of trading cards would be

The water-diamond paradox

We will keep buying digital music downloads from the Internet until the marginal utility of the music downloads

-Given the demand curve in this graph,if this product or service were free,how much consumer surplus would the individual receive?

Jason's cooking is so terrible that Melissa says she will have to be paid in order to even try it.Thus,her marginal utility for Jason's cooking is

-Assume the demand curve is line AD.If price is OF,the consumer surplus is bounded by letters

Statement I: The marginal utility of diamonds we purchase is quite high. Statement II: The marginal utility of water we consume is quite high.

A Brief Economic History of the United States

Resource Utilization

The Mixed Economy

Supply and Demand

The Household Consumption Sector

The Business Investment Sector

The Government Sector

The Export-Import Sector

Gross Domestic Product

Economic Fluctuations, unemployment, and Inflation

Classical and Keynesian Economics

Fiscal Policy and the National Debt

Money and Banking

The Federal Reserve and Monetary Policy

A Century of Economic Theory

Economic Growth and Productivity

Demand,supply,and Equilibrium

The Price Elasticities of Demand and Supply

Cost

Profit, loss, and Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Corporate Mergers and Antitrust

Demand in the Factor Market

Labor Unions

Labor Markets and Wage Rates

Rent, interest, and Profit

Income Distribution and Poverty

International Trade

International Finance

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