Question 1

Consider the utility function U = 5x +3y2, which has MUx = 5 and MUy = 6y. The indifference curves for this utility function

Accepted Answer

A)  will have a diminishing marginal rate of substitution of x for y as x increases. 
B)  will have a constant marginal rate of substitution of x for y as x increases. 
C)  will have an increasing marginal rate of substitution of x for y as x increases. 
D)  will be straight lines. 
A)  will have a diminishing marginal rate of substitution of x for y as x increases. 
B)  will have a constant marginal rate of substitution of x for y as x increases. 
C)  will have an increasing marginal rate of substitution of x for y as x increases. 
D)  will be straight lines.

Question 2

Indifference curves have a negative slope when

Accepted Answer

A)  the consumer likes good X but dislikes good Y. 
B)  the consumer likes good Y  but dislikes good X . 
C)  the consumer likes both good X and good Y . 
D)  the consumer dislikes both goods. 
A)  the consumer likes good X but dislikes good Y. 
B)  the consumer likes good Y  but dislikes good X . 
C)  the consumer likes both good X and good Y . 
D)  the consumer dislikes both goods.

Question 3

John tends to order pizza once or twice a week to his college dorm room. When his parents come to visit, he always asks them to take him to the local steakhouse. Bob is probably suffering from:

Accepted Answer

A)  Veganism 
B)  Transitivity. 
C)  Diminishing marginal utility from pizza consumption. 
D)  Completeness and transitivity. 
A)  Veganism 
B)  Transitivity. 
C)  Diminishing marginal utility from pizza consumption. 
D)  Completeness and transitivity.

Question 4

Consider the utility function U = 5x +3y2, which has MUx = 5 and MUy = 6y. The indifference curves for this utility function

Accepted Answer

A)  will be straight lines. 
B)  will have the same $ M R S_{x, y} $ as y increases holding x constant. 
C)  will have the same $ M R S_{x, y} $ as x increases holding y constant. 
D)  will have a diminishing marginal rate of substitution as the consumer substitutes x for y . 
A)  will be straight lines. 
B)  will have the same $ M R S_{x, y} $ as y increases holding x constant. 
C)  will have the same $ M R S_{x, y} $ as x increases holding y constant. 
D)  will have a diminishing marginal rate of substitution as the consumer substitutes x for y .

Question 5

Which of the following utility functions is an example of preferences for perfect complements?

Accepted Answer

A)  $U ( x , y ) = y \sqrt { x }$ 
B)  $U ( x , y ) = \min \{ 2 x , y \}$ 
C)  $U ( x , y ) = 3 x + 5 y$ 
D)  $U ( x , y ) = 2 x ^ { 2 } + 4 y$ 
A)  $U ( x , y ) = y \sqrt { x }$ 
B)  $U ( x , y ) = \min \{ 2 x , y \}$ 
C)  $U ( x , y ) = 3 x + 5 y$ 
D)  $U ( x , y ) = 2 x ^ { 2 } + 4 y$

Question 6

Suppose for a utility function that the marginal utility for good x is given by MUx = 5y2/x

Accepted Answer

A)  The more is better assumption is not satisfied for x in this utility function. 
B)  The more is better assumption is satisfied for x in this utility function. 
C)  This shows a positive and increasing marginal utility of x. 
D)  The marginal rate of substitution must be diminishing. 
A)  The more is better assumption is not satisfied for x in this utility function. 
B)  The more is better assumption is satisfied for x in this utility function. 
C)  This shows a positive and increasing marginal utility of x. 
D)  The marginal rate of substitution must be diminishing.

Question 7

Sally likes Jim twice as much as she likes Bob. This is an example of

Accepted Answer

A)  ordinal preferences. 
B)  cardinal preferences. 
C)  transitivity. 
D)  diminishing marginal utility. 
A)  ordinal preferences. 
B)  cardinal preferences. 
C)  transitivity. 
D)  diminishing marginal utility.

Question 8

Consumer preferences:

Accepted Answer

A)  are fixed exogenously and unchanging in reality. 
B)  indicate how a consumer would rank any two possible baskets of goods, taking into account her budget constraint. 
C)  indicate how a consumer would rank any two possible baskets of goods, taking into account the current prices of those goods. 
D)  indicate how a consumer would rank any two possible baskets of goods, assuming that the baskets were available to the consumer at no cost. 
A)  are fixed exogenously and unchanging in reality. 
B)  indicate how a consumer would rank any two possible baskets of goods, taking into account her budget constraint. 
C)  indicate how a consumer would rank any two possible baskets of goods, taking into account the current prices of those goods. 
D)  indicate how a consumer would rank any two possible baskets of goods, assuming that the baskets were available to the consumer at no cost.

Question 9

Jacob's estimated utility from pizza is given by 3Z, where Z is the number of pizzas he consumes per month. We can say that:

Accepted Answer

A)  Jacob likes pizza better than steak. 
B)  Jacob is a vegetarian. 
C)  Jacob's preferences are transitive. 
D)  Jacob's marginal utility from pizza is constant. 
A)  Jacob likes pizza better than steak. 
B)  Jacob is a vegetarian. 
C)  Jacob's preferences are transitive. 
D)  Jacob's marginal utility from pizza is constant.

Question 10

Which of the following statements is false?

Accepted Answer

A)  Total utility and marginal utility cannot be plotted on the same graph 
B)  The marginal utility is the slope of the (total) utility function 
C)  Marginal utility is not the slope of total utility 
D)  The relationship between total and marginal functions holds for other measures in economics 
A)  Total utility and marginal utility cannot be plotted on the same graph 
B)  The marginal utility is the slope of the (total) utility function 
C)  Marginal utility is not the slope of total utility 
D)  The relationship between total and marginal functions holds for other measures in economics

Question 11

The assumption that preferences are complete requires the consumer

Accepted Answer

A)  to rank any two baskets. 
B)  to say that basket C is preferred to basket A if basket B is preferred to basket A and basket C is preferred to basket B. 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution. 
A)  to rank any two baskets. 
B)  to say that basket C is preferred to basket A if basket B is preferred to basket A and basket C is preferred to basket B. 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution.

Question 12

A consumer would not generally be represented as deriving utility from:

Accepted Answer

A)  the brand name of a product 
B)  the characteristics of a product 
C)  the price of a product 
D)  the packaging of a product 
A)  the brand name of a product 
B)  the characteristics of a product 
C)  the price of a product 
D)  the packaging of a product

Question 13

When total utility, U(x) is maximized, marginal utility, MUx is

Accepted Answer

A)  constant. 
B)  rising. 
C)  maximized. 
D)  zero. 
A)  constant. 
B)  rising. 
C)  maximized. 
D)  zero.

Question 14

Marginal utility is

Accepted Answer

A)  the slope of the total utility function. 
B)  the slope of a ray from the origin to the total utility function. 
C)  always less than average utility. 
D)  always greater than average utility. 
A)  the slope of the total utility function. 
B)  the slope of a ray from the origin to the total utility function. 
C)  always less than average utility. 
D)  always greater than average utility.

Question 15

Which of the following utility functions is an example of Quasi-linear preferences?

Accepted Answer

A)  $U ( x , y ) = y \sqrt { x }$ 
B)  $U ( x , y ) = \min \{ 2 x , y \}$ 
C)  $U ( x , y ) = 3 x + 5 y$ 
D)  $U ( x , y ) = 2 x ^ { 2 } + 4 y$ 
A)  $U ( x , y ) = y \sqrt { x }$ 
B)  $U ( x , y ) = \min \{ 2 x , y \}$ 
C)  $U ( x , y ) = 3 x + 5 y$ 
D)  $U ( x , y ) = 2 x ^ { 2 } + 4 y$

Question 16

Marginal utility is

Accepted Answer

A)  always increasing. 
B)  maximized when total utility is zero. 
C)  the slope of the total utility function. 
D)  always decreasing. 
A)  always increasing. 
B)  maximized when total utility is zero. 
C)  the slope of the total utility function. 
D)  always decreasing.

Question 17

The assumption that preferences are transitive requires the consumer

Accepted Answer

A)  to rank any two baskets. 
B)  to say that basket C is preferred to basket
A if basket B is preferred to basket A and basket C is preferred to basket B. 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution. 
A)  to rank any two baskets. 
B)  to say that basket C is preferred to basket
A if basket B is preferred to basket A and basket C is preferred to basket B. 
C)  to rank a basket with more units of all goods higher than a basket with fewer units of all goods. 
D)  to have a diminishing marginal rate of substitution.

Question 18

If two goods are perfect substitutes, then

Accepted Answer

A)  the marginal rate of substitution is constant. 
B)  the indifference curves are straight lines. 
C)  the indifference curves are "L-shaped." 
D)  both a) and b) are true. 
A)  the marginal rate of substitution is constant. 
B)  the indifference curves are straight lines. 
C)  the indifference curves are "L-shaped." 
D)  both a) and b) are true.

Question 19

Which of the following statements best explains the concept of diminishing marginal utility?

Accepted Answer

A)  As I consume additional ice cream cones, each ice cream cone adds more to my total happiness than the previous one. 
B)  I must consume ice cream cones until I have a stomach ache. 
C)  As I consume additional ice cream cones, each ice cream cone adds less to my total happiness than the previous one. 
D)  I must maximize my consumption of ice cream cones. 
A)  As I consume additional ice cream cones, each ice cream cone adds more to my total happiness than the previous one. 
B)  I must consume ice cream cones until I have a stomach ache. 
C)  As I consume additional ice cream cones, each ice cream cone adds less to my total happiness than the previous one. 
D)  I must maximize my consumption of ice cream cones.

Question 20

A _____________________ measures the level of satisfaction that a consumer receives from any basket of goods.

Accepted Answer

A)  production function. 
B)  transformation function. 
C)  utility function. 
D)  transitivity function. 
A)  production function. 
B)  transformation function. 
C)  utility function. 
D)  transitivity function.

Consider the utility function U = 5x +3y², which has MU_x = 5 and MU_y = 6y. The indifference curves for this utility function

Indifference curves have a negative slope when

John tends to order pizza once or twice a week to his college dorm room. When his parents come to visit, he always asks them to take him to the local steakhouse. Bob is probably suffering from:

Consider the utility function U = 5x +3y², which has MU_x = 5 and MU_y = 6y. The indifference curves for this utility function

Which of the following utility functions is an example of preferences for perfect complements?

Suppose for a utility function that the marginal utility for good x is given by MU_x = 5y²/x

Sally likes Jim twice as much as she likes Bob. This is an example of

Consumer preferences:

Jacob's estimated utility from pizza is given by 3Z, where Z is the number of pizzas he consumes per month. We can say that:

Which of the following statements is false?

The assumption that preferences are complete requires the consumer

A consumer would not generally be represented as deriving utility from:

When total utility, U(x) is maximized, marginal utility, MU_x is

Marginal utility is

Which of the following utility functions is an example of Quasi-linear preferences?

Marginal utility is

The assumption that preferences are transitive requires the consumer

If two goods are perfect substitutes, then

Which of the following statements best explains the concept of diminishing marginal utility?

A _____________________ measures the level of satisfaction that a consumer receives from any basket of goods.

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Exam 3: Consumer Preferences and the Concept of Utility

Consider the utility function U = 5x +3y2, which has MUx = 5 and MUy = 6y. The indifference curves for this utility function

Indifference curves have a negative slope when

John tends to order pizza once or twice a week to his college dorm room. When his parents come to visit, he always asks them to take him to the local steakhouse. Bob is probably suffering from:

Consider the utility function U = 5x +3y2, which has MUx = 5 and MUy = 6y. The indifference curves for this utility function

Which of the following utility functions is an example of preferences for perfect complements?

Suppose for a utility function that the marginal utility for good x is given by MUx = 5y2/x

Sally likes Jim twice as much as she likes Bob. This is an example of

Consumer preferences:

Jacob's estimated utility from pizza is given by 3Z, where Z is the number of pizzas he consumes per month. We can say that:

Which of the following statements is false?

The assumption that preferences are complete requires the consumer

A consumer would not generally be represented as deriving utility from:

When total utility, U(x) is maximized, marginal utility, MUx is

Marginal utility is

Which of the following utility functions is an example of Quasi-linear preferences?

Marginal utility is

The assumption that preferences are transitive requires the consumer

If two goods are perfect substitutes, then

Which of the following statements best explains the concept of diminishing marginal utility?

A _____________________ measures the level of satisfaction that a consumer receives from any basket of goods.

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Choice

The Theory of Demand

Inputs and Production Functions

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Consider the utility function U = 5x +3y², which has MU_x = 5 and MU_y = 6y. The indifference curves for this utility function

Consider the utility function U = 5x +3y², which has MU_x = 5 and MU_y = 6y. The indifference curves for this utility function

Suppose for a utility function that the marginal utility for good x is given by MU_x = 5y²/x

When total utility, U(x) is maximized, marginal utility, MU_x is