Question 1

An indifference curve shows the

Accepted Answer

A)  Maximum utility that can be achieved for a given consumer budget. 
B)  Maximum utility that can be achieved for different amounts of a good. 
C)  Combinations of goods giving equal utility to a consumer. 
D)  Optimal consumption combinations between two goods. 
A)  Maximum utility that can be achieved for a given consumer budget. 
B)  Maximum utility that can be achieved for different amounts of a good. 
C)  Combinations of goods giving equal utility to a consumer. 
D)  Optimal consumption combinations between two goods.

Question 2

The farther an indifference curve is from the origin, the more total utility it yields.

Accepted Answer

A) True 
 B)False

Question 3

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.
$\begin{array}{llllll}
\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\
 \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\
\hline 1&40&40&1&30&30\2&\_\_\_&32&2&\_\_\_&20\3&96&24&2&66&16\4&112&\_\_\_&5&84&\_\_\_&
\end{array}$
Table 19.3
Michael's Utility Schedule In Table 19.3, what is the total utility of two units of cola?

Accepted Answer

A)  32. 
B)  40. 
C)  72. 
D)  96. 
A)  32. 
B)  40. 
C)  72. 
D)  96.

Question 4

Utility maximization is always achieved where total revenue is maximized.

Accepted Answer

A) True 
 B)False

Question 5

A budget constraint line represents combinations of two goods that provide an individual the same total utility.

Accepted Answer

A) True 
 B)False

Question 6

The marginal utility for a good is computed as

Accepted Answer

A)  Total utility divided by quantity. 
B)  Quantity divided by total utility. 
C)  The change in quantity divided by total utility. 
D)  The change in total utility divided by the change in quantity. 
A)  Total utility divided by quantity. 
B)  Quantity divided by total utility. 
C)  The change in quantity divided by total utility. 
D)  The change in total utility divided by the change in quantity.

Question 7

If a good had a zero price (i.e., the good was free), a rational person would consume

Accepted Answer

A)  An infinite amount of the good. 
B)  The good until total utility was zero. 
C)  The good until the marginal utility was maximized. 
D)  The good until the marginal utility of the last unit was zero. 
A)  An infinite amount of the good. 
B)  The good until total utility was zero. 
C)  The good until the marginal utility was maximized. 
D)  The good until the marginal utility of the last unit was zero.

Question 8

An indifference map shows

Accepted Answer

A)  A set of indifference curves. 
B)  One indifference curve. 
C)  A set of indifference curves and a set of budget constraints. 
D)  A set of budget constraints and one indifference curve. 
A)  A set of indifference curves. 
B)  One indifference curve. 
C)  A set of indifference curves and a set of budget constraints. 
D)  A set of budget constraints and one indifference curve.

Question 9

Economic explanations of consumer behavior take into consideration

Accepted Answer

A)  Ego gratification. 
B)  Lack of self-confidence. 
C)  Social status. 
D)  Prices and income. 
A)  Ego gratification. 
B)  Lack of self-confidence. 
C)  Social status. 
D)  Prices and income.

Question 10

Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Accepted Answer

A) True 
 B)False

Question 11

Which industry here is unlikely to exhibit price discrimination?

Accepted Answer

A)  Airlines. 
B)  New cars. 
C)  Supermarkets. 
D)  Colleges. 
A)  Airlines. 
B)  New cars. 
C)  Supermarkets. 
D)  Colleges.

Question 12

Economists focus on the effect of changes in income and prices in influencing actual consumer purchases.

Accepted Answer

A) True 
 B)False

Question 13

Which of these examples is an example of price discrimination?

Accepted Answer

A)  Goods are marked down on sale. 
B)  Wholesale prices differ from retail prices. 
C)  Seniors pay one price at the movie theater and adults pay more. 
D)  Cereal manufacturers put discount coupons inside their cereal boxes. 
A)  Goods are marked down on sale. 
B)  Wholesale prices differ from retail prices. 
C)  Seniors pay one price at the movie theater and adults pay more. 
D)  Cereal manufacturers put discount coupons inside their cereal boxes.

Question 14

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.Point D on the graph

Accepted Answer

A)  Is not affordable. 
B)  Is affordable but does not yield the highest utility possible. 
C)  Is affordable and is the optimal consumption bundle for this individual. 
D)  Lies on an indifference curve that is not obtainable. 
A)  Is not affordable. 
B)  Is affordable but does not yield the highest utility possible. 
C)  Is affordable and is the optimal consumption bundle for this individual. 
D)  Lies on an indifference curve that is not obtainable.

Question 15

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.
$\begin{array}{llllll}
\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\
 \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\
\hline 1&40&40&1&30&30\2&\_\_\_&32&2&\_\_\_&20\3&96&24&2&66&16\4&112&\_\_\_&5&84&\_\_\_&
\end{array}$
Table 19.3
Michael's Utility Schedule The marginal utility per dollar of the third pretzel is

Accepted Answer

A)  4. 
B)  5. 
C)  6. 
D)  12. 
A)  4. 
B)  5. 
C)  6. 
D)  12.

Question 16

Refer to Figure 19.2.Total utility is maximized at

Accepted Answer

A)  6 apples. 
B)  7 apples. 
C)  1 apple. 
D)  3 apples. 
A)  6 apples. 
B)  7 apples. 
C)  1 apple. 
D)  3 apples.

Question 17

Marginal utility is the

Accepted Answer

A)  Change in total utility obtained by spending one extra dollar on a good or service. 
B)  Change in total utility obtained by consuming one extra unit of a good or service. 
C)  Change in total utility obtained by selling one extra unit of a good or service. 
D)  Utility received from consuming the optimal combination of goods and services. 
A)  Change in total utility obtained by spending one extra dollar on a good or service. 
B)  Change in total utility obtained by consuming one extra unit of a good or service. 
C)  Change in total utility obtained by selling one extra unit of a good or service. 
D)  Utility received from consuming the optimal combination of goods and services.

Question 18

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.
$\begin{array}{llllll}
\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\
 \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\
\hline 1&40&40&1&30&30\2&\_\_\_&32&2&\_\_\_&20\3&96&24&2&66&16\4&112&\_\_\_&5&84&\_\_\_&
\end{array}$
Table 19.3
Michael's Utility Schedule Refer to Table 19.3.If Michael has $28 dollars to spend, why will three colas and four pretzels not be optimal?

Accepted Answer

A)  This combination has less total utility. 
B)  This combination is affordable but does not maximize utility. 
C)  This combination is not affordable. 
D)  This combination has less marginal utility per dollar. 
A)  This combination has less total utility. 
B)  This combination is affordable but does not maximize utility. 
C)  This combination is not affordable. 
D)  This combination has less marginal utility per dollar.

Question 19

The four determinants of demand that are held constant when we consider a movement along a demand curve include all of the following except

Accepted Answer

A)  Price. 
B)  Income. 
C)  Tastes. 
D)  Availability and price of substitute goods. 
A)  Price. 
B)  Income. 
C)  Tastes. 
D)  Availability and price of substitute goods.

Question 20

Consumer surplus does not exist because some consumers cannot afford to purchase the product at all.

Accepted Answer

A) True 
 B)False

An indifference curve shows the

The farther an indifference curve is from the origin, the more total utility it yields.

Utility maximization is always achieved where total revenue is maximized.

A budget constraint line represents combinations of two goods that provide an individual the same total utility.

The marginal utility for a good is computed as

If a good had a zero price (i.e., the good was free), a rational person would consume

An indifference map shows

Economic explanations of consumer behavior take into consideration

Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Which industry here is unlikely to exhibit price discrimination?

Economists focus on the effect of changes in income and prices in influencing actual consumer purchases.

Which of these examples is an example of price discrimination?

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.Point D on the graph

Refer to Figure 19.2.Total utility is maximized at

Marginal utility is the

The four determinants of demand that are held constant when we consider a movement along a demand curve include all of the following except

Consumer surplus does not exist because some consumers cannot afford to purchase the product at all.

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

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Exam 5: Consumer Choice

An indifference curve shows the

The farther an indifference curve is from the origin, the more total utility it yields.

Utility maximization is always achieved where total revenue is maximized.

A budget constraint line represents combinations of two goods that provide an individual the same total utility.

The marginal utility for a good is computed as

If a good had a zero price (i.e., the good was free), a rational person would consume

An indifference map shows

Economic explanations of consumer behavior take into consideration

Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Which industry here is unlikely to exhibit price discrimination?

Economists focus on the effect of changes in income and prices in influencing actual consumer purchases.

Which of these examples is an example of price discrimination?

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.Point D on the graph

Refer to Figure 19.2.Total utility is maximized at

Marginal utility is the

The four determinants of demand that are held constant when we consider a movement along a demand curve include all of the following except

Consumer surplus does not exist because some consumers cannot afford to purchase the product at all.

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

Filters