Question 1

Along the demand curve for a good, _____.​

Accepted Answer

A) the dollar value of marginal utility changes 
B) total utility changes due to changes in income levels 
C) real income changes due to changes in the price of the good 
D) marginal valuation changes due to changes in income levels 
E) consumer surplus changes due to changes in income levels 
A) the dollar value of marginal utility changes 
B) total utility changes due to changes in income levels 
C) real income changes due to changes in the price of the good 
D) marginal valuation changes due to changes in income levels 
E) consumer surplus changes due to changes in income levels A

Question 2

The following graph shows the demand curves for three consumers in the market, as represented by D, D' and D''. The market demand curve will _____. ​
Figure 6.10

Accepted Answer

A) be steeper than each of the three individual demand curves 
B) be more elastic than each of the three individual demand curves 
C) be flatter than each of the three individual demand curves 
D) be more inelastic than each of the three individual demand curves 
E) lie to the left of the curve D 
A) be steeper than each of the three individual demand curves 
B) be more elastic than each of the three individual demand curves 
C) be flatter than each of the three individual demand curves 
D) be more inelastic than each of the three individual demand curves 
E) lie to the left of the curve D D

Question 3

Water is essential to life, while diamonds are not. However, water is cheap and diamonds are expensive. This paradox can be resolved by focusing on:​

Accepted Answer

A) total utility rather than average utility. 
B) average utility rather than marginal utility. 
C) marginal utility rather than total utility. 
D) total utility rather than marginal utility. 
E) average utility rather than total utility. 
A) total utility rather than average utility. 
B) average utility rather than marginal utility. 
C) marginal utility rather than total utility. 
D) total utility rather than marginal utility. 
E) average utility rather than total utility. C

Question 4

Marginal utility is the:​

Accepted Answer

A) overall satisfaction obtained from consuming a good. 
B) additional satisfaction obtained from consuming one more unit of a good. 
C) average satisfaction obtained from consuming a good. 
D) increase in satisfaction that results from consuming 1 percent less of a good. 
E) additional cost of purchasing one more unit of a good. 
A) overall satisfaction obtained from consuming a good. 
B) additional satisfaction obtained from consuming one more unit of a good. 
C) average satisfaction obtained from consuming a good. 
D) increase in satisfaction that results from consuming 1 percent less of a good. 
E) additional cost of purchasing one more unit of a good.

Question 5

Suppose Annie allocates her income between calzones and juices and that she has not yet spent her entire income. If the marginal utility of a fourth calzone is 100 units and the marginal utility of a third glass of juice is 50 units, she will:​

Accepted Answer

A) eat the fourth calzone as one unit of a calzone has a higher marginal utility than a glass of juice. 
B) drink the third glass of juice because she had only two glasses of juice. 
C) consider the total utility derived from the consumption of three calzones and two glasses of juice before deciding what to consume next. 
D) consider the relative prices of calzones and juices before deciding what to consume next. 
E) consider whether her marginal utilities are diminishing or not before deciding what to consume next. 
A) eat the fourth calzone as one unit of a calzone has a higher marginal utility than a glass of juice. 
B) drink the third glass of juice because she had only two glasses of juice. 
C) consider the total utility derived from the consumption of three calzones and two glasses of juice before deciding what to consume next. 
D) consider the relative prices of calzones and juices before deciding what to consume next. 
E) consider whether her marginal utilities are diminishing or not before deciding what to consume next.

Question 6

As long as scarcity exists, _____.​

Accepted Answer

A) product prices play no role in consumers' utility maximization 
B) income plays no role in consumers' utility maximization 
C) income and product prices should both be considered for consumers' utility maximization 
D) consumers maximize utility by consuming all products until the marginal utilities of additional amounts is zero 
E) consumers would increase consumption of all products as long as total utility is positive 
A) product prices play no role in consumers' utility maximization 
B) income plays no role in consumers' utility maximization 
C) income and product prices should both be considered for consumers' utility maximization 
D) consumers maximize utility by consuming all products until the marginal utilities of additional amounts is zero 
E) consumers would increase consumption of all products as long as total utility is positive

Question 7

The following table shows the total utility and marginal utility derived from the consumption of scones. The first column of the table represents the number of scones a consumer consumes in a day. The second column of the table presents the total utility derived from that consumption, and the third column shows the marginal utility of each additional scone. The marginal utility of the fourth scone is _____ units. ​
Table 6.3
​

Accepted Answer

A) 4 
B) 7 
C) 6 
D) 24 
E) 2 
A) 4 
B) 7 
C) 6 
D) 24 
E) 2

Question 8

Which of the following statements is true of utility?​

Accepted Answer

A) It is possible to precisely measure the utility an individual receives from consuming a particular good or service. 
B) It is always possible to determine whether Darlene or Julie gets more utility from consuming two units of the same good. 
C) The utility of goods can be measured while that of services cannot. 
D) Utility is a subjective measure of satisfaction an individual receives from consuming a good or service. 
E) The concept of utility is useful only if there is no scarcity. 
A) It is possible to precisely measure the utility an individual receives from consuming a particular good or service. 
B) It is always possible to determine whether Darlene or Julie gets more utility from consuming two units of the same good. 
C) The utility of goods can be measured while that of services cannot. 
D) Utility is a subjective measure of satisfaction an individual receives from consuming a good or service. 
E) The concept of utility is useful only if there is no scarcity.

Question 9

Consumers must understand the economist's law of diminishing marginal utility in order to maximize their satisfaction.

Accepted Answer

A) True 
 B)False

Question 10

The following image shows the market equilibrium for opera tickets. The graph shows that a demand curve for opera tickets, labeled D and a supply curve of opera tickets, labeled S. Area _____ represents the maximum amount that consumers are willing to pay for 10 opera tickets?. ​
Figure 6.7
​

Accepted Answer

A) a 
B) b 
C) c 
D) a + b + c​ 
E) a + b 
A) a 
B) b 
C) c 
D) a + b + c​ 
E) a + b

Question 11

Consumer surplus is:​

Accepted Answer

A) the amount by which quantity supplied exceeds quantity demanded at the current market price. 
B) the amount by which quantity demanded exceeds quantity supplied at the current market price. 
C) the change in total utility derived from a one-unit change in the consumption of a good. 
D) the horizontal sum of the individual demand curves for all consumers in the market. 
E) valued by the difference between the maximum price consumers are willing to pay and the amount they actually pay. 
A) the amount by which quantity supplied exceeds quantity demanded at the current market price. 
B) the amount by which quantity demanded exceeds quantity supplied at the current market price. 
C) the change in total utility derived from a one-unit change in the consumption of a good. 
D) the horizontal sum of the individual demand curves for all consumers in the market. 
E) valued by the difference between the maximum price consumers are willing to pay and the amount they actually pay.

Question 12

The law of diminishing marginal utility states that the marginal utility of my tenth pistachio is less than the marginal utility of my third pistachio, other things constant.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is not true of consumer preferences?​

Accepted Answer

A) Pat enjoys her second cotton candy less than her first. 
B) Bill enjoys his third cotton candy less than his second. 
C) Arnie enjoys two cotton candies more than one cotton candy. 
D) Arnie enjoys two cotton candies more than Pat enjoys one cotton candy. 
E) Bill and Arnie enjoy their third cotton candies less than they do their first. 
A) Pat enjoys her second cotton candy less than her first. 
B) Bill enjoys his third cotton candy less than his second. 
C) Arnie enjoys two cotton candies more than one cotton candy. 
D) Arnie enjoys two cotton candies more than Pat enjoys one cotton candy. 
E) Bill and Arnie enjoy their third cotton candies less than they do their first.

Question 14

The following image shows the demand curve for neckties. If neckties were available free of cost, then _____. ​
Figure 6.3
​​

Accepted Answer

A) total utility, consumer surplus, and consumer expenditure would be undefined 
B) total utility and consumer surplus would be valued at $20, but consumer expenditure would be undefined 
C) total utility, consumer surplus, and consumer expenditure would all be equal to zero 
D) total utility, consumer surplus, and consumer expenditure would all be at its maximum 
E) total utility and consumer surplus would be valued at $36; consumer expenditure would be zero 
A) total utility, consumer surplus, and consumer expenditure would be undefined 
B) total utility and consumer surplus would be valued at $20, but consumer expenditure would be undefined 
C) total utility, consumer surplus, and consumer expenditure would all be equal to zero 
D) total utility, consumer surplus, and consumer expenditure would all be at its maximum 
E) total utility and consumer surplus would be valued at $36; consumer expenditure would be zero

Question 15

Which of the following is true of units of utility?​

Accepted Answer

A) They evaluate the purchasing power of consumers. 
B) They cannot be compared across consumers. 
C) They apply to goods but not to services. 
D) They do not exist for very wealthy individuals. 
E) They are negative for inferior goods. 
A) They evaluate the purchasing power of consumers. 
B) They cannot be compared across consumers. 
C) They apply to goods but not to services. 
D) They do not exist for very wealthy individuals. 
E) They are negative for inferior goods.

Question 16

According to the law of _____, the marginal utility received from each additional unit of a good consumed declines, other things constant.​

Accepted Answer

A) increasing marginal returns 
B) marginal rate of substitution 
C) supply 
D) diminishing marginal utility 
E) increasing marginal rate of substitution 
A) increasing marginal returns 
B) marginal rate of substitution 
C) supply 
D) diminishing marginal utility 
E) increasing marginal rate of substitution

Question 17

Which of the following is true when the price of a good falls?​

Accepted Answer

A) Consumer surplus always increases. 
B) Consumer surplus always decreases. 
C) Consumer surplus never changes. 
D) Producer surplus increases. 
E) Producer surplus remains unchanged. 
A) Consumer surplus always increases. 
B) Consumer surplus always decreases. 
C) Consumer surplus never changes. 
D) Producer surplus increases. 
E) Producer surplus remains unchanged.

Question 18

Suppose the marginal utility of a unit of good x = MUx, the marginal utility of a unit of good y = MUy, Px= price of a unit of good x, and Py= price of a unit of a good y. A utility-maximizing consumer who purchases two goods, x and y, allocates her budget in such a way that _____.​

Accepted Answer

A) MUx = MUy 
B) TUx = TUy 
C) MUx/Py = MUy/Px 
D) TUx/Py = TUy/Px 
E) MUx/Px = MUy/Py 
A) MUx = MUy 
B) TUx = TUy 
C) MUx/Py = MUy/Px 
D) TUx/Py = TUy/Px 
E) MUx/Px = MUy/Py

Question 19

Differences in the opportunity cost of time among consumers do not have any effect on consumption patterns.

Accepted Answer

A) True 
 B)False

Question 20

The law of diminishing marginal utility states that:​

Accepted Answer

A) total utility falls as more of a good is consumed, other things constant. 
B) total utility falls as marginal utility falls, other things constant. 
C) marginal utility increases as total utility falls, other things constant. 
D) marginal utility falls as more of a good is consumed, other things constant. 
E) marginal utility falls as less of a good is consumed, other things constant. 
A) total utility falls as more of a good is consumed, other things constant. 
B) total utility falls as marginal utility falls, other things constant. 
C) marginal utility increases as total utility falls, other things constant. 
D) marginal utility falls as more of a good is consumed, other things constant. 
E) marginal utility falls as less of a good is consumed, other things constant.

Along the demand curve for a good, _____.

The following graph shows the demand curves for three consumers in the market, as represented by D, D' and D''. The market demand curve will _____. Figure 6.10

Water is essential to life, while diamonds are not. However, water is cheap and diamonds are expensive. This paradox can be resolved by focusing on:

Marginal utility is the:

Suppose Annie allocates her income between calzones and juices and that she has not yet spent her entire income. If the marginal utility of a fourth calzone is 100 units and the marginal utility of a third glass of juice is 50 units, she will:

As long as scarcity exists, _____.

Which of the following statements is true of utility?

Consumers must understand the economist's law of diminishing marginal utility in order to maximize their satisfaction.

The following image shows the market equilibrium for opera tickets. The graph shows that a demand curve for opera tickets, labeled D and a supply curve of opera tickets, labeled S. Area _____ represents the maximum amount that consumers are willing to pay for 10 opera tickets?. Figure 6.7

Consumer surplus is:

The law of diminishing marginal utility states that the marginal utility of my tenth pistachio is less than the marginal utility of my third pistachio, other things constant.

Which of the following statements is not true of consumer preferences?

The following image shows the demand curve for neckties. If neckties were available free of cost, then _____. Figure 6.3

Which of the following is true of units of utility?

According to the law of _____, the marginal utility received from each additional unit of a good consumed declines, other things constant.

Which of the following is true when the price of a good falls?

Suppose the marginal utility of a unit of good x = MU_x, the marginal utility of a unit of good y = MU_y, P_x= price of a unit of good x, and P_y= price of a unit of a good y. A utility-maximizing consumer who purchases two goods, x and y, allocates her budget in such a way that _____.

Differences in the opportunity cost of time among consumers do not have any effect on consumption patterns.

The law of diminishing marginal utility states that:

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, Entrepreneurship, and Corporate Finance

Transaction Costs, Asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters

Exam 6: Consumer Choice and Demand

Along the demand curve for a good, _____.​

The following graph shows the demand curves for three consumers in the market, as represented by D, D' and D''. The market demand curve will _____. ​ Figure 6.10

Water is essential to life, while diamonds are not. However, water is cheap and diamonds are expensive. This paradox can be resolved by focusing on:​

Marginal utility is the:​

Suppose Annie allocates her income between calzones and juices and that she has not yet spent her entire income. If the marginal utility of a fourth calzone is 100 units and the marginal utility of a third glass of juice is 50 units, she will:​

As long as scarcity exists, _____.​

Which of the following statements is true of utility?​

Consumers must understand the economist's law of diminishing marginal utility in order to maximize their satisfaction.

The following image shows the market equilibrium for opera tickets. The graph shows that a demand curve for opera tickets, labeled D and a supply curve of opera tickets, labeled S. Area _____ represents the maximum amount that consumers are willing to pay for 10 opera tickets?. ​ Figure 6.7 ​

Consumer surplus is:​

The law of diminishing marginal utility states that the marginal utility of my tenth pistachio is less than the marginal utility of my third pistachio, other things constant.

Which of the following statements is not true of consumer preferences?​

The following image shows the demand curve for neckties. If neckties were available free of cost, then _____. ​ Figure 6.3 ​​

Which of the following is true of units of utility?​

According to the law of _____, the marginal utility received from each additional unit of a good consumed declines, other things constant.​

Which of the following is true when the price of a good falls?​

Suppose the marginal utility of a unit of good x = MUx, the marginal utility of a unit of good y = MUy, Px= price of a unit of good x, and Py= price of a unit of a good y. A utility-maximizing consumer who purchases two goods, x and y, allocates her budget in such a way that _____.​

Differences in the opportunity cost of time among consumers do not have any effect on consumption patterns.

The law of diminishing marginal utility states that:​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, Entrepreneurship, and Corporate Finance

Transaction Costs, Asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters

Along the demand curve for a good, _____.

The following graph shows the demand curves for three consumers in the market, as represented by D, D' and D''. The market demand curve will _____. Figure 6.10

Water is essential to life, while diamonds are not. However, water is cheap and diamonds are expensive. This paradox can be resolved by focusing on:

Marginal utility is the:

Suppose Annie allocates her income between calzones and juices and that she has not yet spent her entire income. If the marginal utility of a fourth calzone is 100 units and the marginal utility of a third glass of juice is 50 units, she will:

As long as scarcity exists, _____.

Which of the following statements is true of utility?

The following image shows the market equilibrium for opera tickets. The graph shows that a demand curve for opera tickets, labeled D and a supply curve of opera tickets, labeled S. Area _____ represents the maximum amount that consumers are willing to pay for 10 opera tickets?. Figure 6.7

Consumer surplus is:

Which of the following statements is not true of consumer preferences?

The following image shows the demand curve for neckties. If neckties were available free of cost, then _____. Figure 6.3

Which of the following is true of units of utility?

According to the law of _____, the marginal utility received from each additional unit of a good consumed declines, other things constant.

Which of the following is true when the price of a good falls?

Suppose the marginal utility of a unit of good x = MU_x, the marginal utility of a unit of good y = MU_y, P_x= price of a unit of good x, and P_y= price of a unit of a good y. A utility-maximizing consumer who purchases two goods, x and y, allocates her budget in such a way that _____.

The law of diminishing marginal utility states that: