Question 1

Peter is deciding between consuming Good X and Good Y.At his current level of consumption,his marginal utility per dollar for Good X is less than the marginal utility per dollar for Good Y.To achieve the consumer optimum,Peter needs to

Accepted Answer

A)  consume more of Good Y until the marginal utility per dollar for Good X is greater than the marginal utility for Good Y. 
B)  consume less of Good X or more of Good Y until the marginal utility per dollar for Good X and Good Y is equal. 
C)  consume more of both Good X and Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X. 
D)  consume less of both Good X and Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X. 
E)  continue at his current level of consumption.

Question 2

Refer to the following table to answer the following questions:
 
-Assume that chips cost $1 and soda costs $2.If the consumer has $7,the combination of goods that would maximize her utility per dollar and remain within her budget would be

Accepted Answer

A)  0 chips and 4 sodas. 
B)  6 chips and 5 sodas. 
C)  5 chips and 1 soda. 
D)  4 chips and 2 sodas. 
E)  2 chips and 3 sodas.

Question 3

On a single graph,draw the supply and demand curves for both water and diamonds.Make sure the price of diamonds is higher than the price of water.
a.Label the total utility of water.
b.Label the total utility of diamonds.

Accepted Answer

The answer of On a single graph,draw the supply and...

Question 4

Which of the following statements is always true when determining the consumer optimum?

Accepted Answer

A)  Maximizing utility does not take budget restraints into consideration. 
B)  Maximizing utility is easy if you are considering only two goods. 
C)  Maximizing utility requires the marginal utility per dollar to be equal for each good consumed. 
D)  Maximizing utility requires the total utility per dollar to be equal for each good consumed. 
E)  Maximizing utility requires the marginal utility to be equal for each good.

Question 5

Refer to the following table to answer the following questions:
 
-Assume that strawberries cost $1 and apples cost $2.Which of the following combinations of strawberries and apples satisfies the following rule?

Accepted Answer

A)  2 strawberries and 4 apples. 
B)  6 strawberries and 5 apples. 
C)  5 strawberries and 5 apples. 
D)  3 strawberries and 2 apples. 
E)  6 strawberries and 7 apples.

Question 6

Refer to the following table to answer the following questions:
 
-The marginal utility of the eighth unit is

Accepted Answer

A)  -30 utils. 
B)  30 utils. 
C)  50 utils. 
D)  20 utils. 
E)  0 utils.

Question 7

A(n)________ is a quantification of relative satisfaction.

Accepted Answer

A)  number 
B)  util 
C)  enjoyment 
D)  marginality 
E)  model

Question 8

Refer to the following table to answer the following questions:
 
-Assume that chips cost $1 and soda costs $2.If the consumer has $14,the combination of goods that would maximize his utility per dollar and remain within his budget would be

Accepted Answer

A)  2 chips and 7 sodas. 
B)  6 chips and 4 sodas. 
C)  4 chips and 6 sodas. 
D)  4 chips and 2 sodas. 
E)  7 chips and 7 sodas.

Question 9

When comparing two goods for purchase,it is useful to acknowledge the marginal utility and the dollar price.The optimizing decision requires choosing the good with the

Accepted Answer

A)  higher total utility per dollar. 
B)  higher marginal utility per dollar. 
C)  lower marginal price. 
D)  higher marginal utility. 
E)  equivalent marginal and dollar prices.

Question 10

Suppose Annabelle's favorite ice cream flavor,strawberry,costs $1.50 per cone and chocolate costs $1.00 per cone.If she receives 10 utils when she eats chocolate ice cream,how many additional utils would she need to get from eating strawberry ice cream to make her indifferent between purchasing the two flavors of ice cream?

Accepted Answer

A)  15 
B)  10 
C)  25 
D)  5 
E)  20

Question 11

A company in Irvine,California,is interested in buying season tickets to the local baseball team.Tickets for scheduled games are sold individually for $12 each,but season tickets are only $4 each.The reason why the local baseball team has to charge less for season tickets can be explained by

Accepted Answer

A)  the real-income effect. 
B)  the consumer optimum. 
C)  marginal utility. 
D)  the substitution effect. 
E)  diminishing marginal utility.

Question 12

Diminishing marginal utility is a decline in ________ with each additional ________.

Accepted Answer

A)  units consumed; utility 
B)  utility; util 
C)  unit; satisfaction 
D)  satisfaction; unit 
E)  utils; increase

Question 13

Since two goods are subject to diminishing marginal utility,the marginal rate of substitution is

Accepted Answer

A)  constant. 
B)  always decreasing. 
C)  always increasing. 
D)  the inverse slope of the indifference curve. 
E)  variant.

Question 14

Suppose Chuck's favorite beverage is cold lemonade and it costs $2 per glass,whereas a bottle of water costs $1.If Chuck receives 30 utils when he drinks water,how many additional utils would he need to get from drinking lemonade to cause him to spend the extra dollar it costs to buy it?

Accepted Answer

The answer of Suppose Chuck's favorite beverage is cold lemonade...

Question 15

Jon is at a sports bar watching the Olympics.He has been eating chicken wings and drinking root beer all night and has only enough money to buy one or the other before the bar closes.The waitress stops by the table and asks him if he wants anything else.Using utility theory,how will Jon make his decision?

Accepted Answer

The answer of Jon is at a sports bar watching...

Question 16

A consumer cannot be indifferent about two combinations that yield disparate levels of utility.Therefore,an indifference curve cannot be

Accepted Answer

A)  flat. 
B)  linear. 
C)  thin. 
D)  thick. 
E)  segmented.

Question 17

Someone who is not a "morning person" is often heard saying,"I'm cranky until I've had a cup of coffee." After that first cup of coffee (and a mood improvement),the person experiences the uncommon phenomenon of ________.That is,of course,until the stress of a typical day takes its toll.

Accepted Answer

A)  increasing marginal utility 
B)  decreasing marginal utility 
C)  constant marginal utility 
D)  rare utility 
E)  rebounding utility

Question 18

Draw the indifference curves for two goods that are perfect substitutes.

Accepted Answer

The answer of Draw the indifference curves for two goods...

Question 19

When marginal utility is negative,total utility

Accepted Answer

A)  increases. 
B)  decreases. 
C)  can increase or decrease. 
D)  stays the same. 
E)  is equal to zero.

Question 20

Refer to the following figure to answer the following questions:
 
-Total utility is highest at the ________ cupcake.

Accepted Answer

A)  first 
B)  eighth 
C)  ninth 
D)  seventh 
E)  sixth

Exam 16: Consumer Choice

Peter is deciding between consuming Good X and Good Y.At his current level of consumption,his marginal utility per dollar for Good X is less than the marginal utility per dollar for Good Y.To achieve the consumer optimum,Peter needs to

Refer to the following table to answer the following questions: -Assume that chips cost $1 and soda costs $2.If the consumer has $7,the combination of goods that would maximize her utility per dollar and remain within her budget would be

On a single graph,draw the supply and demand curves for both water and diamonds.Make sure the price of diamonds is higher than the price of water. a.Label the total utility of water. b.Label the total utility of diamonds.

Which of the following statements is always true when determining the consumer optimum?

Refer to the following table to answer the following questions: -Assume that strawberries cost $1 and apples cost $2.Which of the following combinations of strawberries and apples satisfies the following rule?

Refer to the following table to answer the following questions: -The marginal utility of the eighth unit is

A(n) ________ is a quantification of relative satisfaction.

Refer to the following table to answer the following questions: -Assume that chips cost $1 and soda costs $2.If the consumer has $14,the combination of goods that would maximize his utility per dollar and remain within his budget would be