Question 1

-Refer to the above figure.Which point represents the highest level of utility?

Accepted Answer

A) Point A 
B) Point B 
C) Point C 
D) Point D 
A) Point A 
B) Point B 
C) Point C 
D) Point D

Question 2

If the price of a pizza slice falls,Tom can

Accepted Answer

A) buy more pizza with his paycheck. 
B) buy more soft drinks with his paycheck. 
C) no longer afford pizza on his paycheck. 
D) Either A or B is possible. 
A) buy more pizza with his paycheck. 
B) buy more soft drinks with his paycheck. 
C) no longer afford pizza on his paycheck. 
D) Either A or B is possible.

Question 3

For most goods,the real-income effect of a price change is

Accepted Answer

A) small because the good accounts for a small part of the consumer's budget. 
B) small because the decision to buy a good depends only on the income of a consumer. 
C) large because the price of the good is in terms of the currency and the income of the person is also in terms of the currency. 
D) zero because the real-income effect only applies to durable goods. 
A) small because the good accounts for a small part of the consumer's budget. 
B) small because the decision to buy a good depends only on the income of a consumer. 
C) large because the price of the good is in terms of the currency and the income of the person is also in terms of the currency. 
D) zero because the real-income effect only applies to durable goods.

Question 4

Which economic principle accounts for the fact that all-you-can-eat buffet restaurants can be profitable?

Accepted Answer

A) The law of demand 
B) The principle of diminishing marginal utility 
C) The principle of diminishing marginal product 
D) The law of supply 
A) The law of demand 
B) The principle of diminishing marginal utility 
C) The principle of diminishing marginal product 
D) The law of supply

Question 5

Given the price of a good or service,what determines how much a person is willing to pay for that good or service?

Accepted Answer

A) marginal utility 
B) total utility 
C) the substitution effect 
D) average utility 
A) marginal utility 
B) total utility 
C) the substitution effect 
D) average utility

Question 6

In economics,utility is defined as

Accepted Answer

A) the want-satisfying power of a good or service. 
B) the usefulness of a good or service. 
C) the utilitarian value of a good or service. 
D) the objective measure of the desirability of a good or service. 
A) the want-satisfying power of a good or service. 
B) the usefulness of a good or service. 
C) the utilitarian value of a good or service. 
D) the objective measure of the desirability of a good or service.

Question 7

$\begin{array}{cccccc}
\text {Ouantity  }&&\text {Ouantity  }&&\text {Ouantity  }&\
\text { of A } & \mathbf{M U}_{\mathbf{a}} & \text { of B } & \mathbf{M U}_{\mathbf{b}} & \text { of C } & \mathbf{M U}_{\mathbf{c}} \
\hline 1 & 15 & 1 & 12 & 1 & 15 \
2 & 12 & 2 & 10 & 2 & 10 \
3 & 9 & 3 & 8 & 3 & 5 \
4 & 6 & 4 & 4 & 4 & 4
\end{array}$
-Based on the information in the above table,the price of A is $3,the price of B is $2,and the price of C is $5.If Mary has $22 to spend,what combination of products A,B,and C should she buy in order to maximize her satisfaction?

Accepted Answer

A) 3 units of product A; 3 units of product B; 1 unit of product C 
B) 2 units of product A; 3 units of product B; 2 units of product C 
C) 3 units of product A; 4 units of product B; 0 units of product C 
D) 2 units of product A; 1 unit of product B; 4 units of product C 
A) 3 units of product A; 3 units of product B; 1 unit of product C 
B) 2 units of product A; 3 units of product B; 2 units of product C 
C) 3 units of product A; 4 units of product B; 0 units of product C 
D) 2 units of product A; 1 unit of product B; 4 units of product C

Question 8

If total utility is increasing,then marginal utility is

Accepted Answer

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

Question 9

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

Accepted Answer

A) diminishing marginal utility throughout the entire schedule. 
B) initially increasing marginal utility and then decreasing marginal utility. 
C) initially decreasing marginal utility and then increasing marginal utility. 
D) increasing marginal utility throughout the entire schedule. 
A) diminishing marginal utility throughout the entire schedule. 
B) initially increasing marginal utility and then decreasing marginal utility. 
C) initially decreasing marginal utility and then increasing marginal utility. 
D) increasing marginal utility throughout the entire schedule.

Question 10

What is consumer optimum according to utility theory?

Accepted Answer

Consumer optimum is the set of goods and

Question 11

Which of the following statements is true with respect to total utility and marginal utility?

Accepted Answer

A) Marginal utility always rises as total utility increases. 
B) Marginal utility can decline as total utility rises. 
C) Total utility is not related to marginal utility. 
D) Total utility can decline while marginal utility rises. 
A) Marginal utility always rises as total utility increases. 
B) Marginal utility can decline as total utility rises. 
C) Total utility is not related to marginal utility. 
D) Total utility can decline while marginal utility rises.

Question 12

-Use the above figure.The optimal position for the consumer is at

Accepted Answer

A) J or L 
B) M 
C) K 
D) N 
A) J or L 
B) M 
C) K 
D) N

Question 13

If a consumer is initially at an optimum,and then the price of Y increases,then

Accepted Answer

A)  $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ 
$MU _ { Y }$ /
$P _ { Y }$ . 
C)  $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ =
$MU _ { Y }$ /
$P _ { Y }$ . 
D)  $MU _ { X }$ /
$MU _ { Y }$ >
$P _ { Y }$ /
$\mathrm { P } _ { \mathrm { X } }$ . 
A)  $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ 
$MU _ { Y }$ /
$P _ { Y }$ . 
C)  $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ =
$MU _ { Y }$ /
$P _ { Y }$ . 
D)  $MU _ { X }$ /
$MU _ { Y }$ >
$P _ { Y }$ /
$\mathrm { P } _ { \mathrm { X } }$ .

Question 14

When an individual's purchasing power changes due to a change in the price of a good or service,this is referred to as

Accepted Answer

A) marginal effect. 
B) real-income effect. 
C) substitution effect. 
D) utility effect. 
A) marginal effect. 
B) real-income effect. 
C) substitution effect. 
D) utility effect.

Question 15

-Refer to the above figure.Which point(s)represents the lowest level of utility?

Accepted Answer

A) Points A & C 
B) Point B 
C) Point C only 
D) Point D 
A) Points A & C 
B) Point B 
C) Point C only 
D) Point D

Question 16

The principle that "as more of a good is consumed,its extra benefit declines" is known as

Accepted Answer

A) the law of demand. 
B) the law of diminishing marginal product. 
C) the law of diminishing marginal utility. 
D) the law of comparative advantage. 
A) the law of demand. 
B) the law of diminishing marginal product. 
C) the law of diminishing marginal utility. 
D) the law of comparative advantage.

Question 17

As more of a product is consumed,total utility increases up to a point at which

Accepted Answer

A) marginal utility increases at an increasing rate. 
B) marginal utility increases at a constant rate. 
C) marginal utility decreases. 
D) marginal utility will initially decrease,then increase. 
A) marginal utility increases at an increasing rate. 
B) marginal utility increases at a constant rate. 
C) marginal utility decreases. 
D) marginal utility will initially decrease,then increase.

Question 18

In economics,the term "marginal" refers to

Accepted Answer

A) total. 
B) a change in the total. 
C) negative. 
D) inverse. 
A) total. 
B) a change in the total. 
C) negative. 
D) inverse.

Question 19

A consumer was at an optimum.She then discovers that the marginal utility per dollar spent on food is more than the marginal utility per dollar spent on gasoline.She knows then that

Accepted Answer

A) the price of gasoline must have decreased. 
B) the price of food must have increased. 
C) the price of gasoline must have increased or the price of food must have decreased. 
D) the price of gasoline must have decreased or the price of food must have increased. 
A) the price of gasoline must have decreased. 
B) the price of food must have increased. 
C) the price of gasoline must have increased or the price of food must have decreased. 
D) the price of gasoline must have decreased or the price of food must have increased.

Question 20

At a ball game we can observe people eating hot dogs,chips,and burgers.If all are priced the same and we observe Michelle eating a hot dog and David eating a hamburger,we can conclude that

Accepted Answer

A) Robert will be eating chips. 
B) Michelle likes hot dogs better than David does and David likes hamburgers better than Michelle does. 
C) Michelle derives the same amount of utility from eating a hot dog as David derives from eating a hamburger. 
D) at this time Michelle derives more utility from eating a hot dog than from eating either a hamburger or chips,while David derives more utility from eating a hamburger than from eating either a hot dog or chips. 
A) Robert will be eating chips. 
B) Michelle likes hot dogs better than David does and David likes hamburgers better than Michelle does. 
C) Michelle derives the same amount of utility from eating a hot dog as David derives from eating a hamburger. 
D) at this time Michelle derives more utility from eating a hot dog than from eating either a hamburger or chips,while David derives more utility from eating a hamburger than from eating either a hot dog or chips.

-Refer to the above figure.Which point represents the highest level of utility?

If the price of a pizza slice falls,Tom can

For most goods,the real-income effect of a price change is

Which economic principle accounts for the fact that all-you-can-eat buffet restaurants can be profitable?

Given the price of a good or service,what determines how much a person is willing to pay for that good or service?

In economics,utility is defined as

If total utility is increasing,then marginal utility is

What is consumer optimum according to utility theory?

Which of the following statements is true with respect to total utility and marginal utility?

-Use the above figure.The optimal position for the consumer is at

If a consumer is initially at an optimum,and then the price of Y increases,then

When an individual's purchasing power changes due to a change in the price of a good or service,this is referred to as

-Refer to the above figure.Which point(s)represents the lowest level of utility?

The principle that "as more of a good is consumed,its extra benefit declines" is known as

As more of a product is consumed,total utility increases up to a point at which

In economics,the term "marginal" refers to

A consumer was at an optimum.She then discovers that the marginal utility per dollar spent on food is more than the marginal utility per dollar spent on gasoline.She knows then that

At a ball game we can observe people eating hot dogs,chips,and burgers.If all are priced the same and we observe Michelle eating a hot dog and David eating a hamburger,we can conclude that

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

-Refer to the above figure.Which point represents the highest level of utility?

If the price of a pizza slice falls,Tom can

For most goods,the real-income effect of a price change is

Which economic principle accounts for the fact that all-you-can-eat buffet restaurants can be profitable?

Given the price of a good or service,what determines how much a person is willing to pay for that good or service?

In economics,utility is defined as

If total utility is increasing,then marginal utility is

What is consumer optimum according to utility theory?

Which of the following statements is true with respect to total utility and marginal utility?

-Use the above figure.The optimal position for the consumer is at

If a consumer is initially at an optimum,and then the price of Y increases,then

When an individual's purchasing power changes due to a change in the price of a good or service,this is referred to as

-Refer to the above figure.Which point(s)represents the lowest level of utility?

The principle that "as more of a good is consumed,its extra benefit declines" is known as

As more of a product is consumed,total utility increases up to a point at which

In economics,the term "marginal" refers to

A consumer was at an optimum.She then discovers that the marginal utility per dollar spent on food is more than the marginal utility per dollar spent on gasoline.She knows then that

At a ball game we can observe people eating hot dogs,chips,and burgers.If all are priced the same and we observe Michelle eating a hot dog and David eating a hamburger,we can conclude that

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