Question 1

According to the law of demand, ceteris paribus,

Accepted Answer

A) The quantity demanded increases at lower prices. 
B) A consumer will purchase more of a good at higher prices than at lower prices. 
C) Price and quantity supplied are directly related. 
D) The responsiveness of consumer demand to a change in the price of a good is measured by the price elasticity of demand. 
A) The quantity demanded increases at lower prices. 
B) A consumer will purchase more of a good at higher prices than at lower prices. 
C) Price and quantity supplied are directly related. 
D) The responsiveness of consumer demand to a change in the price of a good is measured by the price elasticity of demand.

Question 2

Total utility is maximized when

Accepted Answer

A) Price is less than marginal utility. 
B) Price is equal to marginal utility. 
C) Marginal utility is zero. 
D) Marginal utility is maximized. 
A) Price is less than marginal utility. 
B) Price is equal to marginal utility. 
C) Marginal utility is zero. 
D) Marginal utility is maximized.

Question 3

Price discrimination is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Explain how a successful advertising campaign will affect the demand curve for the product being advertised.

Accepted Answer

A successful advertising campaign will s

Question 6

When economists refer to the determinants of demand, they are referring to factors that when changed,

Accepted Answer

A) Cause a movement down a demand curve. 
B) Cause the demand curve to shift left or right. 
C) Influence producer behavior. 
D) Cause a movement up one demand curve. 
A) Cause a movement down a demand curve. 
B) Cause the demand curve to shift left or right. 
C) Influence producer behavior. 
D) Cause a movement up one demand curve.

Question 7

A consumer maximizes total utility from a given amount of income when the

Accepted Answer

A) Marginal utility obtained from the last dollar spent on each good is the same. 
B) Marginal utility of the last unit of each good is the same. 
C) Total utility obtained from each product is the same. 
D) Amount spent for each product is the same. 
A) Marginal utility obtained from the last dollar spent on each good is the same. 
B) Marginal utility of the last unit of each good is the same. 
C) Total utility obtained from each product is the same. 
D) Amount spent for each product is the same.

Question 8

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.
  In Table 19.3 the marginal utility per dollar of the second cola is

Accepted Answer

A) 10. 
B) 6. 
C) 4. 
D) 12. 
A) 10. 
B) 6. 
C) 4. 
D) 12.

Question 9

Assume Amanda always maximizes her total utility given her budget constraint.Every morning for breakfast she has two eggs and three sausages.If the marginal utility of the last egg is 10 utils and the price of eggs is $1 each, what can we say about the marginal utility of the last sausage if the price of each sausage is $2?

Accepted Answer

A) It must be equal to 20 utils. 
B) It must be equal to 10 utils. 
C) It must be equal to 5 utils. 
D) It must be equal to 1 utils. 
A) It must be equal to 20 utils. 
B) It must be equal to 10 utils. 
C) It must be equal to 5 utils. 
D) It must be equal to 1 utils.

Question 10

$\text {Josh is eating pizza at his favorite Italian restaurant. Below is his utility from this consumption:}$
$\begin{array}{|l|l|l|}
\hline & \text { Total Utility } & \text { Marginal Utility } \
\hline \text { First slice of pizza } & 20 & 20 \
\hline \text { Second slice of pizza } & 39 & 19 \
\hline \text { Third slice of pizza } & - & 15 \
\hline \text { Fourth slice of pizza } & 59 & - \
\hline
\end{array}$ 
$\text {Table $19.1$}$  Refer to Table 19.1.For Josh, diminishing marginal utility begins

Accepted Answer

A) After the first slice of pizza. 
B) After the third slice of pizza. 
C) After the second slice of pizza. 
D) To increase after the first slice of pizza. 
A) After the first slice of pizza. 
B) After the third slice of pizza. 
C) After the second slice of pizza. 
D) To increase after the first slice of pizza.

Question 11

If an individual demands a good, it means that he or she

Accepted Answer

A) Has a strong desire for the good. 
B) Is willing and able to purchase the good at some price. 
C) Must need the good. 
D) Prefers the good to all other choices. 
A) Has a strong desire for the good. 
B) Is willing and able to purchase the good at some price. 
C) Must need the good. 
D) Prefers the good to all other choices.

Question 12

Suppose Caesar allocates his entire budget to the purchase of soft drinks and chips.The marginal utility of the last bottle of soft drink purchased is 12 utils, and each bottle costs $1.20.The marginal utility of the last bag of chips purchased is 8 utils, and each bag costs $1.In order to maximize his utility, Caesar should

Accepted Answer

A) Buy more soft drinks and fewer chips since he gets more marginal utility per dollar from soft drinks. 
B) Buy more chips and fewer soft drinks because of the lower price for chips. 
C) Buy more soft drinks and fewer chips because the soft drink has fewer calories. 
D) Not change anything because he has made the choice that gives him the most total utility. 
A) Buy more soft drinks and fewer chips since he gets more marginal utility per dollar from soft drinks. 
B) Buy more chips and fewer soft drinks because of the lower price for chips. 
C) Buy more soft drinks and fewer chips because the soft drink has fewer calories. 
D) Not change anything because he has made the choice that gives him the most total utility.

Question 13

An indifference curve shows the combinations of two goods that yield the same level of utility.

Accepted Answer

A) True 
 B)False

Question 14

Most goods can yield

Accepted Answer

A) Only positive marginal utility. 
B) Both positive and negative marginal utility. 
C) Only negative marginal utility. 
D) Only zero marginal utility. 
A) Only positive marginal utility. 
B) Both positive and negative marginal utility. 
C) Only negative marginal utility. 
D) Only zero marginal utility.

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.
  Refer to Table 19.3.Suppose Michael has $28 to spend on cola and pretzels.What combination should he purchase in order to maximize his utility?

Accepted Answer

A) Three colas and four pretzels. 
B) One cola and five pretzels. 
C) Three colas and one pretzel. 
D) Two colas and three pretzels. 
A) Three colas and four pretzels. 
B) One cola and five pretzels. 
C) Three colas and one pretzel. 
D) Two colas and three pretzels.

Question 16

Which of the following is used to depict all combinations of goods that are affordable with a given income and given prices?

Accepted Answer

A) An indifference curve. 
B) An indifference map. 
C) A demand curve. 
D) A budget constraint. 
A) An indifference curve. 
B) An indifference map. 
C) A demand curve. 
D) A budget constraint.

Question 17

Psychology and sociology focus on what creates desires for goods, but economics focuses on what consumers actually purchase.

Accepted Answer

A) True 
 B)False

Question 18

Consumer theory predicts that a consumer will purchase the product with the highest marginal utility per dollar.

Accepted Answer

A) True 
 B)False

Question 19

Maximum utility is achieved when

Accepted Answer

A) Total revenue is the greatest. 
B) The price elasticity of demand is 1.0. 
C) Marginal utility is zero. 
D) Total utility equals marginal utility. 
A) Total revenue is the greatest. 
B) The price elasticity of demand is 1.0. 
C) Marginal utility is zero. 
D) Total utility equals marginal utility.

Question 20

If marginal utility is rising, then total utility must be falling.

Accepted Answer

A) True 
 B)False

According to the law of demand, ceteris paribus,

Total utility is maximized when

Price discrimination is illegal in the United States.

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

Explain how a successful advertising campaign will affect the demand curve for the product being advertised.

When economists refer to the determinants of demand, they are referring to factors that when changed,

A consumer maximizes total utility from a given amount of income when the

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. In Table 19.3 the marginal utility per dollar of the second cola is

If an individual demands a good, it means that he or she

An indifference curve shows the combinations of two goods that yield the same level of utility.

Most goods can yield

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Refer to Table 19.3.Suppose Michael has $28 to spend on cola and pretzels.What combination should he purchase in order to maximize his utility?

Which of the following is used to depict all combinations of goods that are affordable with a given income and given prices?

Psychology and sociology focus on what creates desires for goods, but economics focuses on what consumers actually purchase.

Consumer theory predicts that a consumer will purchase the product with the highest marginal utility per dollar.

Maximum utility is achieved when

If marginal utility is rising, then total utility must be falling.

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

International Finance

Global Poverty

Filters

Exam 5: Consumer Choice

According to the law of demand, ceteris paribus,

Total utility is maximized when

Price discrimination is illegal in the United States.

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

Explain how a successful advertising campaign will affect the demand curve for the product being advertised.

When economists refer to the determinants of demand, they are referring to factors that when changed,

A consumer maximizes total utility from a given amount of income when the

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. In Table 19.3 the marginal utility per dollar of the second cola is

If an individual demands a good, it means that he or she

An indifference curve shows the combinations of two goods that yield the same level of utility.

Most goods can yield

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Refer to Table 19.3.Suppose Michael has $28 to spend on cola and pretzels.What combination should he purchase in order to maximize his utility?

Which of the following is used to depict all combinations of goods that are affordable with a given income and given prices?

Psychology and sociology focus on what creates desires for goods, but economics focuses on what consumers actually purchase.

Consumer theory predicts that a consumer will purchase the product with the highest marginal utility per dollar.

Maximum utility is achieved when

If marginal utility is rising, then total utility must be falling.

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

International Finance

Global Poverty

Filters