Exam 7: Consumer Choice

If you and a group of friends have been consuming large quantities of liquid beverages on a hot summer afternoon and you decide to refrain from any additional consumption,it can be concluded that

-Use the above figure.When the budget line rotates from "b" to "c"

Quantity Total Utility 0 0 1 15 2 35 3 55 4 75 5 85 6 90 -Refer to the above table.At what quantity does diminishing marginal utility set in?

The fact that consumers will purchase more of a good that has become relatively cheaper

If a consumer is at an optimum,consuming X and Y,and the price of X increases,then to get to a new equilibrium the consumer must

Which of the following statements is not true about marginal utility when total utility is at its maximum point?

The marginal rate of substitution is measured along

You consider yourself to be wise consumer.The marginal utility/price ratio of coffee is 12 utils per dollar.If the price of a donut is $0.75,you should only buy the donut if it gives you at least

On a hot summer day,a construction worker enters a McDonald's fast-food restaurant.He orders the first Big Mac.He consumes it within 3 minutes.He then orders a second Big Mac and consumes it in 10 minutes.He eats only half of the third one in 18 minutes and throws away the rest.The store manager offers him the fourth for free.The construction worker says: "No thanks." For the construction worker described above,we can say that

The set of goods and services that maximizes the level of satisfaction for each consumer subject to limited income is

According to utility theory,consumer purchase decisions are made such that

If two units of a good provide 7 utils and the marginal utility of the third unit of the good is 2 utils,what is the total utility from consuming three units of the good?

The substitution effect refers to

The real-income effect shows that

What are the key properties of indifference curves?

The analysis of consumer decision making based on utility maximization is known as

If you could pay for a product according to the marginal utility that you gain from additional consumption,then as you consume more of a product the price you pay would

If a consumer chooses a combination of goods that are inside of her budget line,than

The want-satisfying power of a good or service is known as

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 4th movie is