Question 1

If total utility is decreasing,then marginal utility is

Accepted Answer

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

Question 2

The diamond-water paradox is an example that shows that

Accepted Answer

A) necessities like water should have a higher price. 
B) marginal utility rather than total utility determines what people are willing to pay for a good. 
C) there are exceptions to the law of diminishing marginal utility. 
D) marginal utility can initially increase and then decrease. 
A) necessities like water should have a higher price. 
B) marginal utility rather than total utility determines what people are willing to pay for a good. 
C) there are exceptions to the law of diminishing marginal utility. 
D) marginal utility can initially increase and then decrease.

Question 3

The price of a good that Joe is currently consuming has increased.

Accepted Answer

A) Joe has experienced a decrease in purchasing power. 
B) Joe will experience a shift in the demand curve of the good whose price has increased. 
C) Joe will stop consuming this good. 
D) Joe will experience increasing marginal utility. 
A) Joe has experienced a decrease in purchasing power. 
B) Joe will experience a shift in the demand curve of the good whose price has increased. 
C) Joe will stop consuming this good. 
D) Joe will experience increasing marginal utility.

Question 4

Because the behavioral economics approach suggests many alternative behaviors that people might exhibit if they fail to behave as if they are rational,this approach

Accepted Answer

A) often fails to provide clearly testable behavioral predictions. 
B) reproduces the same predictions as utility analysis. 
C) has an over reliance on the rationality assumption. 
D) ignores the possibility of bounded rationality. 
A) often fails to provide clearly testable behavioral predictions. 
B) reproduces the same predictions as utility analysis. 
C) has an over reliance on the rationality assumption. 
D) ignores the possibility of bounded rationality.

Question 5

When the marginal utility per dollar of good x exceeds the marginal utility per dollar of good y,

Accepted Answer

A) the consumer should consume more of good x. 
B) the consumer is consuming too much of good x. 
C) good y must have a negative marginal utility. 
D) the consumer is in an optimal situation if the price of good x exceeds the price of good y. 
A) the consumer should consume more of good x. 
B) the consumer is consuming too much of good x. 
C) good y must have a negative marginal utility. 
D) the consumer is in an optimal situation if the price of good x exceeds the price of good y.

Question 6

When the total utility from consuming one good is maximized,marginal utility is

Accepted Answer

A) maximized. 
B) minimized. 
C) zero. 
D) positive. 
A) maximized. 
B) minimized. 
C) zero. 
D) positive.

Question 7

Why does a price increase of a product result in a decrease in the quantity demanded of that product,according to utility analysis?

Accepted Answer

There are two effects associated with a

Question 8

Economists once believed utility could be measured.The philosophical school based on the thought known as utilitarianism was developed by the English philosopher

Accepted Answer

A) Jeremy Bentham. 
B) Henri Leconte. 
C) John Lennon. 
D) Bernard Mandeville. 
A) Jeremy Bentham. 
B) Henri Leconte. 
C) John Lennon. 
D) Bernard Mandeville.

Question 9

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { Movies }
\end{array} & \begin{array} { c } 
\text { Total Utility } \
\text { Mary }
\end{array} & \begin{array} { c } 
\text { Total Utility } \
\text { John }
\end{array} \
\hline 3 & 100 & 190 \
4 & 140 & 250 \
5 & 170 & 300 \
6 & 190 & 340 \
7 & 200 & 370 \
8 & 210 & 390 \
9 & 210 & 405 \
10 & 200 & 415 \
11 & 190 & 420 \
\hline
\end{array}$$
-The total utility from consuming 8 units of a good is 155.The marginal utility of the 8th unit is 7 and the marginal utility of the 7th unit is 11.The total utility from consuming 6 units of the good is

Accepted Answer

A) 173. 
B) 144. 
C) 137. 
D) 130. 
A) 173. 
B) 144. 
C) 137. 
D) 130.

Question 10

$$\begin{array} { c c c } 
\text { Number of Bottles of Soda } & \text { Total Utility } & \text { Marginal Utility } \
\hline 1 & 100 & \
2 & & 20 \
3 & & 15\
4 & 140 &
\end{array}$$
-Using the above table,what is the marginal utility of the 4th soda?

Accepted Answer

A) 23.2 
B) 5 
C) 10 
D) 15 
A) 23.2 
B) 5 
C) 10 
D) 15

Question 11

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { Movies }
\end{array} & \begin{array} { c } 
\text { Total Utility } \
\text { Mary }
\end{array} & \begin{array} { c } 
\text { Total Utility } \
\text { John }
\end{array} \
\hline 3 & 100 & 190 \
4 & 140 & 250 \
5 & 170 & 300 \
6 & 190 & 340 \
7 & 200 & 370 \
8 & 210 & 390 \
9 & 210 & 405 \
10 & 200 & 415 \
11 & 190 & 420 \
\hline
\end{array}$$
-According to the above table,Mary's marginal utility from watching the 6th movie is

Accepted Answer

A) 190 units of utility. 
B) 40 units of utility. 
C) 10 units of utility. 
D) 20 units of utility. 
A) 190 units of utility. 
B) 40 units of utility. 
C) 10 units of utility. 
D) 20 units of utility.

Question 12

$$\begin{array} { c r c c c } 
\text { Quantity } &  \text { Total Utility } \
\hline\text { Per Week } & \text { Amy } & \text { Robert } & \text { David } & \text { Michelle } \
\hline 0 & 0 & 0 & 0 & 0 \
1 & 5.0 & 100 & 600 & 60 \
2 & 9.9 & 190 & 1200 & 130 \
3 & 14.7 & 270 & 1800 & 220 \
4 & 19.4 & 340 & 2400 & 310 \
5 & 24.0 & 400 & 3000 & 425 \
6 & 28.5 & 450 & 3600 & 575 \
7 & 32.9 & 490 & 4200 & 900 \
8 & 37.2 & 520 & 4800 & 1275 \
9 & 41.4 & 510 & 5400 & 1770
\end{array}$$
-Refer to the above table.David's utility schedule is characterized by

Accepted Answer

A) diminishing marginal utility. 
B) increasing marginal utility. 
C) constant marginal utility. 
D) decreasing marginal utility. 
A) diminishing marginal utility. 
B) increasing marginal utility. 
C) constant marginal utility. 
D) decreasing marginal utility.

Question 13

The principle of diminishing marginal utility suggests that

Accepted Answer

A) total utility falls with additional consumption. 
B) total utility is usually negative. 
C) the consumer will never tire of additional units of a good. 
D) the rate at which utility increases diminishes as more of a good is consumed. 
A) total utility falls with additional consumption. 
B) total utility is usually negative. 
C) the consumer will never tire of additional units of a good. 
D) the rate at which utility increases diminishes as more of a good is consumed.

Question 14

When a consumer shifts his purchases from product A to product B,the marginal utility of

Accepted Answer

A) A falls and the marginal utility of B will increase. 
B) both A and B will decrease. 
C) A increases and the marginal utility of B will fall. 
D) both A and B will increase. 
A) A falls and the marginal utility of B will increase. 
B) both A and B will decrease. 
C) A increases and the marginal utility of B will fall. 
D) both A and B will increase.

Question 15

The budget constraint shows the

Accepted Answer

A) combinations of goods that generate the same amount of total satisfaction. 
B) possible combinations of goods that can be purchased with a specified income. 
C) changes in consumption of goods that a consumer makes when his income increases. 
D) amount of a good the consumer will buy at various prices. 
A) combinations of goods that generate the same amount of total satisfaction. 
B) possible combinations of goods that can be purchased with a specified income. 
C) changes in consumption of goods that a consumer makes when his income increases. 
D) amount of a good the consumer will buy at various prices.

Question 16

Suppose Isaac's marginal utility from attending his 5th White Sox game was 40 and the marginal utility from attending his 1st U2 concert was 200.Assume that the price of a Sox ticket is $20 and the price of a U2 ticket is $120.Which of the following would be true?

Accepted Answer

A) Isaac would attend more U2 concerts and less Sox games. 
B) Isaac would attend more Sox games and less U2 concerts. 
C) Isaac would not alter his behavior. 
D) Isaac would attend less of both Sox games and U2 concerts. 
A) Isaac would attend more U2 concerts and less Sox games. 
B) Isaac would attend more Sox games and less U2 concerts. 
C) Isaac would not alter his behavior. 
D) Isaac would attend less of both Sox games and U2 concerts.

Question 17

To derive the law of demand,we assume that

Accepted Answer

A) prices are constant. 
B) real prices are constant. 
C) marginal utility is constant. 
D) tastes are constant. 
A) prices are constant. 
B) real prices are constant. 
C) marginal utility is constant. 
D) tastes are constant.

Question 18

If your dinner guest said,"Every bite,including the last bite,tasted as good as the first," then the marginal utility for him

Accepted Answer

A) is decreasing. 
B) is increasing. 
C) is constant. 
D) is positive. 
A) is decreasing. 
B) is increasing. 
C) is constant. 
D) is positive.

Question 19

-Refer to the above figures.Which panel best represents marginal utility?

Accepted Answer

A) Panel A. 
B) Panel B. 
C) Panel C. 
D) Panel D. 
A) Panel A. 
B) Panel B. 
C) Panel C. 
D) Panel D.

Question 20

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity of Movies } \
\text { Watched per Week }
\end{array} & \begin{array} { c } 
\text { Michelle's Total } \
\text { Utility per Week }
\end{array} & \begin{array} { c } 
\text { Robert's Total } \
\text { Utility per Week }
\end{array} \
\hline 0 & 0 & 0 \
1 & 100 & 100 \
2 & 195 & 190 \
3 & 270 & 270 \
4 & 340 & 340 \
5 & 390 & 400 \
6 & 420 & 350 \
7 & 435 & 390 \
8 & 445 & 420 \
9 & 450 & 440 \
10 & 440 & 450 \
\hline
\end{array}$$
-Refer to the above table.The marginal utility of the 5th movie for Robert is

Accepted Answer

A) 400 units of utility. 
B) 50 units of utility. 
C) 60 units of utility. 
D) 70 units of utility. 
A) 400 units of utility. 
B) 50 units of utility. 
C) 60 units of utility. 
D) 70 units of utility.

If total utility is decreasing,then marginal utility is

The diamond-water paradox is an example that shows that

The price of a good that Joe is currently consuming has increased.

Because the behavioral economics approach suggests many alternative behaviors that people might exhibit if they fail to behave as if they are rational,this approach

When the marginal utility per dollar of good x exceeds the marginal utility per dollar of good y,

When the total utility from consuming one good is maximized,marginal utility is

Why does a price increase of a product result in a decrease in the quantity demanded of that product,according to utility analysis?

Economists once believed utility could be measured.The philosophical school based on the thought known as utilitarianism was developed by the English philosopher

Number of Bottles of Soda Total Utility Marginal Utility 1 100 2 20 3 15 4 140 -Using the above table,what is the marginal utility of the 4th soda?

Quantity of Movies Total Utility Mary Total Utility John 3 100 190 4 140 250 5 170 300 6 190 340 7 200 370 8 210 390 9 210 405 10 200 415 11 190 420 -According to the above table,Mary's marginal utility from watching the 6th movie is

The principle of diminishing marginal utility suggests that

When a consumer shifts his purchases from product A to product B,the marginal utility of

The budget constraint shows the

Suppose Isaac's marginal utility from attending his 5th White Sox game was 40 and the marginal utility from attending his 1st U2 concert was 200.Assume that the price of a Sox ticket is $20 and the price of a U2 ticket is $120.Which of the following would be true?

To derive the law of demand,we assume that

If your dinner guest said,"Every bite,including the last bite,tasted as good as the first," then the marginal utility for him

-Refer to the above figures.Which panel best represents marginal utility?

Quantity of Movies Watched per Week Michelle's Total Utility per Week Robert's Total Utility per Week 0 0 0 1 100 100 2 195 190 3 270 270 4 340 340 5 390 400 6 420 350 7 435 390 8 445 420 9 450 440 10 440 450 -Refer to the above table.The marginal utility of the 5th movie for Robert is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 7: Consumer Choice

If total utility is decreasing,then marginal utility is

The diamond-water paradox is an example that shows that

The price of a good that Joe is currently consuming has increased.

Because the behavioral economics approach suggests many alternative behaviors that people might exhibit if they fail to behave as if they are rational,this approach

When the marginal utility per dollar of good x exceeds the marginal utility per dollar of good y,

When the total utility from consuming one good is maximized,marginal utility is

Why does a price increase of a product result in a decrease in the quantity demanded of that product,according to utility analysis?

Economists once believed utility could be measured.The philosophical school based on the thought known as utilitarianism was developed by the English philosopher

Number of Bottles of Soda Total Utility Marginal Utility 1 100 2 20 3 15 4 140 -Using the above table,what is the marginal utility of the 4th soda?

Quantity of Movies Total Utility Mary Total Utility John 3 100 190 4 140 250 5 170 300 6 190 340 7 200 370 8 210 390 9 210 405 10 200 415 11 190 420 -According to the above table,Mary's marginal utility from watching the 6th movie is

The principle of diminishing marginal utility suggests that

When a consumer shifts his purchases from product A to product B,the marginal utility of

The budget constraint shows the

Suppose Isaac's marginal utility from attending his 5th White Sox game was 40 and the marginal utility from attending his 1st U2 concert was 200.Assume that the price of a Sox ticket is $20 and the price of a U2 ticket is $120.Which of the following would be true?

To derive the law of demand,we assume that

If your dinner guest said,"Every bite,including the last bite,tasted as good as the first," then the marginal utility for him

-Refer to the above figures.Which panel best represents marginal utility?

Quantity of Movies Watched per Week Michelle's Total Utility per Week Robert's Total Utility per Week 0 0 0 1 100 100 2 195 190 3 270 270 4 340 340 5 390 400 6 420 350 7 435 390 8 445 420 9 450 440 10 440 450 -Refer to the above table.The marginal utility of the 5th movie for Robert is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters