Deck 10: The Rational Consumer

Question 1

The utility of a good is determined by how much _____ a particular consumer obtains from it.

A) satisfaction
B) usefulness
C) cost
D) need fulfillment

Answer 1

A

Question 2

Xavier notices that the marginal utility of working with a tutor seems to fall with each hour the tutor helps him study. If Xavier keeps the tutor until his grade actually begins to fall, his marginal utility for the last hour of tutoring will be:

A) negative.
B) positive, but rising more slowly.
C) zero.
D) immeasurable.

Answer 2

A

Question 3

The amount by which an additional unit of a good or service changes a consumer's total satisfaction, all other things unchanged, is _____ utility.

A) marginal
B) maximum
C) average
D) required

Answer 3

A

Question 4

Economists identify the satisfaction a person derives from the consumption of goods and services as:

A) happiness.
B) usefulness.
C) utility.
D) pleasure.

Question 5

Which of the following best describes the principle of diminishing marginal utility? As an individual consumes more of a good:

A) the total utility obtained will eventually fall.
B) the total utility obtained will eventually become negative.
C) the addition to total utility obtained from the nth unit of the good will be less than that obtained from the immediately preceding unit of the good.
D) the marginal utility will eventually become negative.

Question 6

How much _____ Susan obtains from eating green beans is a measure of the utility of green beans for her.

A) efficiency
B) usefulness
C) cost
D) satisfaction

Question 7

The amount by which total utility changes when an additional unit of a good is consumed is called _____ utility.

A) average
B) additional
C) maximum
D) marginal

Question 8

For economists, the satisfaction an individual derives from the consumption of goods and services is best described as:

A) happiness.
B) usefulness.
C) utility.
D) opportunity cost.

Question 9

On a sparsely populated island, high-speed Internet service would have a _____ marginal utility than in New York City, while in New York City quiet evenings would carry a _____ marginal utility than on a deserted island.

A) lower; higher
B) higher; lower
C) lower; lower
D) higher; higher

Question 10

The marginal utility of coffee consumption for Steve is the change in _____ generated by consuming an additional cup of coffee.

A) total utility
B) total consumption
C) total demand
D) price

Question 11

To say that you can't have too much of a good thing means that for any good that you enjoy (for example, pizza):

A) higher consumption will always lead to higher utility.
B) higher consumption will cause utility to decrease at an increasing rate.
C) higher consumption will increase utility, but only up to a point; after that utility will start to decrease.
D) it is valid to measure utility in utils.

Question 12

The principle of diminishing marginal utility means that when Sarah eats pizza, her satisfaction from the second slice of pizza is probably _____ that from the first.

A) greater than
B) equal to
C) less than
D) not comparable to

Question 13

Utility is most closely related to:

A) usefulness.
B) satisfaction.
C) requirement.
D) necessity.

Question 14

Utility is the:

A) difference between a firm's total revenue and its total economic cost.
B) good not adequately provided by a free market and usually provided by the government.
C) satisfaction consumers derive from their consumption of goods and services.
D) lowest price that buyers are willing to pay for a given quantity of a good.

Question 15

An individual gets 5 units of utility from one slice of pizza and 9 units of utility from two slices of pizza. The principle of diminishing marginal utility implies that the total utility from three slices of pizza will be _____ units of utility.

A) exactly 12
B) less than 13
C) less than 9
D) more than 14

Question 16

Economists describe the satisfaction consumers receive from consuming goods and services as:

A) utility.
B) income effects.
C) budget constraints.
D) substitution effects.

Question 17

The relation between an individual's consumption bundle and her satisfaction is called a _____ function.

A) demand
B) production
C) consumption
D) utility

Question 18

Which of the following goods is MOST likely to display increasing marginal utility over some range?

A) chicken during the 1920s, when it was considered a luxury good
B) paint, because you need enough to paint at least one entire room
C) lobsters, which are so expensive that you must eat two to get your money's worth
D) peanut butter and jelly sandwiches

Question 19

Suppose bad weather and pollution dramatically reduce the supply of crawfish in Louisiana next year. This would most likely lead to _____ in the marginal utility of crawfish consumption.

A) an increase
B) a decrease
C) no change
D) substitution and income effects

Question 20

In economics, the ability of pumpkin pie to satisfy a want is referred to as its:

A) utility.
B) usefulness.
C) worthiness.
D) necessity.

Question 21

If a consumer derives more utility by spending an additional $1 on good X rather than on good Y:

A) MU_x / P_x > MU_y / P_y.
B) MU_x / P_x = MU_y / P_y.
C) MU_x / P_x < MU_y / P_y.
D) P_x / MU_x > P_y / MU_y.

Question 22

Smedley, a careful utility maximizer, consumes peanut butter and broccoli. Assume that both peanut butter and broccoli are normal goods. He had just achieved the utility-maximizing solution in his consumption of the two goods when the price of broccoli increased. As he adjusted to this event, he consumed _____ peanut butter and _____ broccoli.

A) more; less
B) less; less
C) more; more
D) less; more

Question 23

Diego spends all of his income on milkshakes and french fries. At his current consumption levels the marginal utility of one milkshake and the marginal utility of one order of french fries are equal. According to the optimal consumption rule:

A) Diego is maximizing his utility.
B) Diego is maximizing his utility only if one milkshake and one order of french fries have the same price.
C) Diego should buy more milkshakes and fewer fries if a milkshake costs more than an order of fries.
D) Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both.

Question 24

Juan spends all of his income on baseball cards and candy. At his current consumption bundle, the marginal utility of baseball cards is 20 and the marginal utility of candy is 10. Assuming that diminishing marginal utility applies to both goods, if the price of baseball cards is $10 and the price of candy is $2, Juan should:

A) consume more baseball cards and less candy.
B) consume more candy and fewer baseball cards.
C) continue to consume the current bundle.
D) consume equal amounts of baseball cards and candy.

Question 25

Sally devotes all of her income to the consumption of apples and Reese's Peanut Butter Cups. At her current level of consumption the marginal utility of an apple is 6 and the marginal utility of a Reese's Peanut Butter Cup is 8. Assume that diminishing marginal utility applies to both apples and Reese's Peanut Butter Cups. Suppose the price of an apple is $0.20 and the price of a Reese's Peanut Butter Cup is $0.25. To maximize her total utility, assuming that the goods are divisible, she would:

A) consume more Reese's Peanut Butter Cups and fewer apples.
B) consume less of both goods.
C) consume more apples and fewer Reese's Peanut Butter Cups.
D) There is not enough information to justify a change in her current level of consumption.

Question 26

At the optimal consumption bundle:

A) the marginal utility of all goods consumed is equal.
B) the marginal utility per dollar spent is equal for all goods consumed.
C) the price of all goods consumed is equal.
D) total utility from all goods consumed is equal.

Question 27

Jill, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods. She had just achieved the utility-maximizing solution in her consumption of the two goods when the price of peanut butter increased. As she adjusted to this event, the marginal utility of peanut butter _____ and that of ice cream _____.

A) rose; rose
B) fell; fell
C) fell; rose
D) rose; fell

Question 28

If, for Adam, the marginal utility of ties is greater than the marginal utility of shirts, to maximize utility, Adam should:

A) buy more ties and fewer shirts.
B) buy more shirts and fewer ties.
C) buy the same amount of each.
D) determine the price of ties and the price of shirts before he decides how many of each to buy.

Question 29

Assume that diminishing marginal utility applies to both slippers and tutus and that Natasha is spending all of her income. If Natasha purchases a combination of ballet slippers and tutus such that MU_Slippers / P_Slippers = 20 and MU_Tutus / P_Tutus = 5, to maximize utility, Natasha should buy _____ slippers and _____ tutus.

A) more; fewer
B) fewer; more
C) more; more
D) fewer; fewer

Question 30

Sally devotes all of her income to the consumption of apples and Reese's Peanut Butter Cups. At her current level of consumption the marginal utility of an apple is 6 and the marginal utility of a Reese's Peanut Butter Cup is 8. Assume that diminishing marginal utility applies to both apples and Reese's Peanut Butter Cups. Suppose the price of an apple is $0.10, while the price of a Reese's Peanut Butter Cup is $0.25. To maximize her total utility, assuming that the goods are divisible, she would:

A) consume more Reese's Peanut Butter Cups and fewer apples.
B) consume less of both goods.
C) consume more apples and fewer Reese's Peanut Butter Cups.
D) There is not enough information to justify a change in her current level of consumption.

Question 31

Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. He had just achieved the utility-maximizing solution in his consumption of the two goods when the price of peanut butter fells. As he adjusted to this event, the marginal utility of peanut butter _____ and the marginal utility of ice cream _____.

A) rose; rose
B) fell; fell
C) fell; rose
D) rose; fell

Question 32

Marge has spent her entire budget on milk and cookies. The last glass of milk provided Marge with 10 additional utils and the last cookie provided her with 25 additional utils. The price of a cookie is twice the price of a glass of milk. Assuming that diminishing marginal utility applies to both goods, Marge should consume _____ milk and _____ cookies.

A) more; fewer
B) less; more
C) more; more
D) less; fewer

Question 33

Smedley, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods. He had just achieved the utility-maximizing solution in his consumption of the two goods when the price of ice cream increased. As he adjusted to this event, he consumed _____ peanut butter and _____ ice cream.

A) more; more
B) less; less
C) more; less
D) less; more

Question 34

Faced with two goods to buy, diamonds and silver, a utility-maximizing individual will buy according to the statement that:

A) the price of diamonds equals the price of silver.
B) marginal utility of diamonds equals marginal utility of silver.
C) the price of diamonds divided by marginal utility of silver equals the price of silver divided by marginal utility of diamonds.
D) marginal utility of diamonds divided by price of diamonds equals marginal utility of silver divided by price of silver.

Question 35

Assume that diminishing marginal utility applies to both dish soap and floor wax and that Minh is spending all of her income. If Minh purchases a combination of dish soap and floor wax such that MU_{Dish soap} / P_{Dish soap} = 50 and MU_{Floor wax} / P_{Floor wax} = 30, to maximize utility, Minh should buy _____ soap and _____ floor wax.

A) less; less
B) more; more
C) more; less
D) less; more

Question 36

Assume that Siri is consuming the utility-maximizing quantities of pork and chicken. We can conclude that:

A) the price of pork equals the price of chicken.
B) the marginal utility of pork equals the marginal utility of chicken.
C) the ratio of the marginal utility to price is the same for pork as it is for chicken.
D) Siri is consuming the same amount of pork and chicken.

Question 37

Nancy is consuming her optimal consumption bundle of burritos and margaritas. The marginal utility of her last burrito was 75 utils, and each burrito costs $3. Her marginal utility of her last margarita was 100 utils. What is the price of a margarita?

A) $1
B) $2
C) $3
D) $4

Question 38

Assume that diminishing marginal utility applies to both textbooks and concert tickets and that Sun is spending all of his income. If Sun purchases a combination of textbooks and concert tickets such that MU_Textbooks / P_Textbooks= 100 and MU_Tickets / P_Tickets = 80, to maximize utility, Sun should buy _____ textbooks and _____ tickets.

A) fewer; fewer
B) more; fewer
C) fewer; more.
D) more; more

Question 39

The optimal consumption rule for all goods requires:

A) the marginal utility of all goods consumed divided by the price to be equal to the budget constraint.
B) the marginal utility of all goods consumed to exceed the total utility of all goods.
C) the marginal utility of all goods consumed divided by the respective price to be equal.
D) the prices of all goods to be equal.

Question 40

Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income. If a consumer purchases a combination of coffee and football tickets such that MU_Coffee / P_Coffee = 20 and MU_{Football tickets} / P_{Football tickets} = 10, to maximize utility, the consumer should buy _____ coffee and _____ football tickets.

A) less; more
B) more; fewer
C) more; more
D) less; fewer

Question 41

Tori devotes all of her income to the consumption of peanut butter and jelly. She has just discovered that at her current level of consumption the marginal utility of a jar of peanut butter is 5 and the marginal utility of a jar of jelly is 7. Which of the following statements is TRUE?

A) To maximize her total utility, Tori should consume more of both goods.
B) To maximize her total utility, Tori should consume less of both goods.
C) To maximize her total utility, Tori should consume more peanut butter and less jelly.
D) There is not enough information provided to justify a change in Tori's level of consumption.

Question 42

Use the following to answer questions:
(Table: Utility from Burgers and Milkshakes) Look at the table Utility from Burgers and Milkshakes. David's marginal utilities for milkshakes and burgers are given in the table. The price of milkshakes is $2, and the price of burgers is $5. If David's income is $22, to maximize his utility, he buys _____ shake(s) and _____ burger(s).

A) 1; 1
B) 6; no
C) 5; 1
D) 6; 2

Question 43

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume three units of good X and three units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.

A) less; less
B) more; more
C) less; more
D) more; less

Question 44

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples falls. Assuming that diminishing marginal utility applies to both goods, as he adjusts to this event, the marginal utility of staples will _____, and the marginal utility of paper clips will _____.

A) rise; fall
B) rise; rise
C) fall; fall
D) fall; rise

Question 45

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples rises. After the change in price Steven should consume _____ staples and _____ paper clips.

A) more; fewer
B) more; more
C) fewer; more
D) fewer; fewer

Question 46

Wolfgang really likes rutabagas and likes broccoli as well. The price of each good is $0.60 per pound and Wolfgang is maximizing utility. At the point of maximal utility the marginal utility of:

A) rutabagas and broccoli are the same.
B) rutabagas is greater than the marginal utility of broccoli.
C) broccoli is greater than the marginal utility of rutabagas.
D) both goods is zero.

Question 47

Use the following to answer question:
(Table: Marginal Utility per Dollar III) Look at the table Marginal Utility per Dollar III. If Liyun has $20 to spend on potatoes and clams, then the utility-maximizing combination is _____ pounds of clams and _____ pounds of potatoes.

A) 2; 6
B) 3; 4
C) 1; 8
D) 3; 9

Question 48

Use the following to answer question:
(Table: Marginal Utility per Dollar) Look at the table Marginal Utility per Dollar. If Damian has $9 to spend on potatoes and clams, then the utility-maximizing combination is _____ pounds of clams and _____ pounds of potatoes.

A) no; 9
B) 2; 2
C) 1; 6
D) 2; 3

Question 49

Use the following to answer question:
(Table: Utility from Pizza and Beer) Look at the table Utility from Pizza and Beer. At All-Sports Bar, a bottle of beer costs $4; a slice of pizza costs $2. Denard has $10 to spend on beer and pizza. To maximize his utility, Denard will consume _____ slice(s) of pizza and _____ bottle(s) of beer.

A) 5; no
B) 3; 1
C) 1; 2
D) 4; 3

Question 50

Use the following to answer questions:
(Table: Utility from Burgers and Milkshakes) Look at the table Utility from Burgers and Milkshakes. David's marginal utilities for milkshakes and burgers are given in the table. The price of milkshakes is $2, and the price of burgers is $5. If David's income is $10, to maximize his utility, he buys _____ shake(s) and _____ burger(s).

A) 1; 1
B) no; 2
C) 5; no
D) 2; 1

Question 51

Use the following to answer question:
(Table: Utility from Milk and Honey) Look at the table Utility from Milk and Honey. The price of milk is $2 and the price of honey is $4. If Max's income is $16, he buys _____ bottle(s) of milk and _____ jar(s) of honey.

A) 1; 1
B) 4; 2
C) 5; 4
D) 6; no

Question 52

John consumes pizza and pasta, both normal goods. He is maximizing his utility in consumption of both goods. The price of pasta rises. Assuming that diminishing marginal utility applies to both goods, as he adjusts to this event, the marginal utility of pizza will _____, and the marginal utility of pasta will _____.

A) rise; rise
B) fall; fall
C) fall; rise
D) rise; fall

Question 53

If Paloma is consuming the utility-maximizing quantities of pizza and soda pop:

A) the price of pizza equals the price of soda pop.
B) the marginal utility of pizza is equal to the marginal utility of soda pop.
C) the ratio of the marginal utility to price is the same for pizza and for soda pop.
D) the total utility of pizza is equal to the total utility of soda pop.

Question 54

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume four units of good X and two units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.

A) less; more
B) more; more
C) less; less
D) more; less

Question 55

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples falls. After the change in price Steven should consume _____ staples and _____ paper clips.

A) more; more
B) more; fewer
C) fewer; fewer
D) fewer; more

Question 56

Use the following to answer question:
(Table: Marginal Utility per Dollar IV) Look at the table Marginal Utility per Dollar IV. If Ashyra has $40 to spend on potatoes and clams, then the utility-maximizing combination is _____ pounds of clams and _____ pounds of potatoes.

A) 3; 4
B) 2; 5
C) 1; 8
D) 2; 6

Question 57

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of paper clips rises. Assuming that diminishing marginal utility applies to both goods, as he adjusts to this event, the marginal utility of staples will _____, and the marginal utility of paper clips will _____.

A) rise; fall
B) fall; rise
C) rise; rise
D) fall; fall

Question 58

Use the following to answer question:
(Table: Marginal Utility per Dollar II) Look at the table Marginal Utility per Dollar II. If Manuel has $18 to spend on potatoes and clams, then the utility-maximizing combination is _____ pounds of clams and _____ pounds of potatoes.

A) 5; 3
B) 4; 6
C) 1; 6
D) 3; 9

Question 59

Wolfgang really likes rutabagas and likes broccoli fairly well. Suppose the price of each good is $0.60 per pound and Wolfgang is maximizing utility, consuming 5 pounds of rutabagas and 0.5 pound of broccoli per month. At the point of maximal utility, the marginal utility of:

A) the two goods is the same.
B) rutabagas is greater than that of broccoli.
C) broccoli is greater than that of rutabagas.
D) both goods is zero.

Question 60

Antonio derives more utility from spending an additional dollar on boots than on gloves. We can assume that:

A) the marginal utility per dollar spent on boots is greater than the marginal utility per dollar spent on gloves.
B) the marginal utility per dollar spent on boots is equal to the marginal utility per dollar spent on gloves.
C) the marginal utility per dollar spent on boots is less than the marginal utility per dollar spent on gloves.
D) boots cost less than gloves.

Question 61

A Giffen good is one in which the _____ curve is _____ sloped.

A) supply; negatively
B) demand; negatively
C) supply; positively
D) demand; positively

Question 62

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $2 per unit, the price of good Y is $1 per unit, and you have $10 to spend on both goods. To maximize utility, you would consume _____ units of X and _____ units of Y.

A) 3; 4
B) 2; 3
C) 2; 6
D) 5; no

Question 63

The demand curve for a normal good will always slope downward because:

A) the substitution effect and the income effect reinforce each other, and the substitution effect always displays an inverse relation between price and quantity demanded.
B) the substitution effect and the income effect reinforce each other, and the income effect always displays an inverse relation between price and quantity demanded.
C) even though the substitution effect and the income effect move in opposite directions, the substitution effect dominates, and it always displays an inverse relation between price and quantity demanded.
D) even though the substitution effect and the income effect move in opposite directions, the income effect dominates, and it always displays an inverse relation between price and quantity demanded.

Question 64

Which of the following best describes the income effect of a price increase?

A) The price of bacon increases, so Michelle buys more sausage.
B) The price of corn chips increases, so Michelle buys potato chips.
C) The tuition at the public university increases, so Michelle attends a community college.
D) Michelle's apartment rent increases, so she cancels her subscription to a monthly magazine.

Question 65

If the price of coffee cups falls and the consumer decides to buy more coffee cups solely because they are less expensive, this describes the:

A) income effect.
B) substitution effect.
C) consumer surplus effect.
D) marginal-maximizing rule.

Question 66

For most goods, demand curves slope downward because:

A) marginal utility rises as quantity demanded increases.
B) the substitution effect constitutes almost the entire effect of a price change, and this effect always causes quantity demanded and price to be inversely related.
C) the income effect constitutes almost the entire effect of a price change, and this effect always causes quantity demanded and price to be inversely related.
D) the income and substitution effects work in opposite directions.

Question 67

The substitution effect always involves a change in consumption in the _____ direction as (to) the _____ change.

A) same; budget
B) same; price
C) opposite; price
D) opposite; budget

Question 68

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that goods X and Y both cost $1 per unit and you have $4 to spend on both goods. To maximize utility, you would consume _____ unit(s) of X and _____ unit(s) of Y.

A) no; 4
B) 1; 3
C) 2; 2
D) 3; 1

Question 69

Use the following to answer questions:
(Table: Consumer Equilibrium) Look again at the table Consumer Equilibrium. Assume that the price of good X is $1 per unit and the price of good Y is $2 per unit and you consume 4 units of good X and 2 units of good Y, and you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.

A) less; less
B) more; more
C) less; more
D) more; less

Question 70

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that goods X and Y both cost $1 per unit and you have $7 to spend on both goods. To maximize utility, you would consume _____ units of X and _____ units of Y.

A) 2; 5
B) 3; 4
C) 4; 3
D) 5; 2

Question 71

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $2 per unit and the price of good Y is $1 per unit, that you consume three units of good X and three units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.

A) less; less
B) more; more
C) less; more
D) more; less

Question 72

According to the substitution effect, a decrease in the price of a product leads to an increase in the quantity of the product demanded because buyers:

A) have more real income.
B) purchase fewer substitute goods.
C) purchase more of the now less expensive good.
D) purchase more complementary goods.

Question 73

Jane is a utility-maximizing consumer who is spending her entire budget on the optimal quantity of wallets and eyeglasses. The price of wallets falls. Jane will _____ her consumption of wallets if wallets are a(n) _____ good and (because) the income effect _____ the substitution effect.

A) decrease; inferior; is weaker than
B) increase; inferior; is stronger than
C) increase; normal; reinforces
D) decrease; normal; reinforces

Question 74

According to the substitution effect, which of the following best describes why a decrease in the price of LED light bulbs leads to an increase in the quantity of LED light bulbs demanded?

A) Buyers have more real income.
B) Buyers always purchase fewer substitute goods for LED light bulbs.
C) Buyers tend to purchase more of the now less expensive LED light bulbs.
D) Buyers tend to purchase more complementary goods to LED light bulbs.

Question 75

The substitution effect always entails a change in consumption in the _____ direction as (of) the change in _____.

A) same; marginal utility
B) same; price
C) opposite; price
D) opposite; the budget

Question 76

The substitution effect of a price change is described by the statement that:

A) when the price of canning jars falls, consumers have more real income with the same nominal income and will buy more canning jars.
B) when the price of canning jars falls, consumers will substitute these lower-priced canning jars for higher-priced goods.
C) the substitution effect is the change in the number of canning jars purchased when the price of spatulas changes.
D) the substitution effect shows how a change in income will affect the quantity of a good purchased.

Question 77

If, because of a price change, both the income and substitution effects are strong for a normal good, this segment of the demand curve must be:

A) unit-elastic.
B) vertical.
C) relatively price-elastic.
D) horizontal.

Question 78

Choices that maximize total utility generally produce demand curves that are:

A) horizontal.
B) upward-sloping.
C) downward-sloping.
D) straight lines.

Question 79

Use the following to answer questions:
(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $5 per unit, the price of good Y is $1 per unit, and you have $10 to spend on both goods. To maximize utility, you would consume _____ unit(s) of X and _____ unit(s) of Y.

A) no; 1
B) 1; 5
C) 4; 6
D) 5; 5

Question 80

Market demand is found by:

A) adding the individual quantities demanded at each price.
B) adding the individual prices at each quantity demanded.
C) multiplying the individual quantities demanded at each price.
D) multiplying the individual prices at each quantity demanded.