Exam 10: The Rational Consumer

Professor Makrung spends his entire weekly income of $700 on economics books (E)and coffee (C).The price of an economics book (P_E)is $50,and the price of a cup of coffee (P_C)is $2.If the professor buys 10 economics books and 50 cups of coffee per week,he finds that MU_E = 75 and MU_C = 3.This implies that a consumption bundle consisting of 10 economics books and 50 cups of coffee per week maximizes the professor's utility.

(True/False)

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Question 41

Mary,an avid gardener,plans to spend 8 hours working in her garden.It takes her 45 minutes to prune a bush and 30 minutes to fertilize a tree.If she prunes eight bushes,she will still have enough time to fertilize six trees.

(True/False)

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Question 42

The law of diminishing marginal utility indicates that the slope of the marginal utility curve is generally:

(Multiple Choice)

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Question 43

Use the following to answer question: -(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the fifth serving she eats is _____ units.

(Multiple Choice)

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Question 44

The optimal consumption rule for all goods requires the:

(Multiple Choice)

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Question 45

(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _ music downloads and _ movies lies INSIDE Tom's budget line (meaning Tom can afford this combination,but he will not be spending the entire $50). Scenario: Tom's Budget Constraint Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.

(Multiple Choice)

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(81)

Question 46

Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.If Faruq spends all of his income,the opportunity cost of one taco equals _____ milkshakes.

(Multiple Choice)

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Question 47

George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).If the price of a doughnut is $1 and the price of coffee is $2.50,his budget constraint can be expressed as:

(Multiple Choice)

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Question 48

Which good is MOST likely to display increasing marginal utility over some range?

(Multiple Choice)

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Question 49

Which statement is FALSE?

(Multiple Choice)

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Question 50

Use the following to answer question: -(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of both a cup of tea and a scone increase to $2?

(Multiple Choice)

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Question 51

When a consumer maximizes utility,the marginal utility from the last dollar spent on all goods and services in the consumption bundle must be the same.This is referred to as:

(Multiple Choice)

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Question 52

Use the following to answer question: -(Table: Utility from Candy Bars and Sodas)Use Table: Utility from Candy Bars and Sodas.If Stan consumes two candy bars and two sodas,his total utility will be _____ utils.

(Multiple Choice)

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(71)

Question 53

Use the following to answer question: -(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Given the information provided,the price of each cup of coffee is _ and the price of each gallon of gasoline is _.

(Multiple Choice)

4.9/5

(80)

Question 54

Mikaela is buying a new motorcycle.She has narrowed her choices to a BMW Classic Montauk or a Honda Valkyrie Rune.She likes the Honda exactly twice as much,but it costs about 40% more.If both bikes are in her budget,she should buy the Honda.

(True/False)

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(81)

Question 55

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 Steven adjusts to this event,the marginal utility of staples will _,and the marginal utility of paper clips will _.

(Multiple Choice)

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Question 56

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

(Multiple Choice)

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Question 57

Use the following to answer question: -(Table: Consumer Equilibrium)Use 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.

(Multiple Choice)

4.7/5

(78)

Question 58

(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _ music downloads and _ movies lies ON Tom's budget line. Scenario: Tom's Budget Constraint Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.

(Multiple Choice)

4.7/5

(77)

Question 59

At Frankie's Buy-the-Slice Pizza,Bill eats three slices of pizza and then realizes that he enjoyed the second slice more than the third.Even though the price per slice is just $1,the utility-maximizing decision is to quit eating now since Bill has reached diminishing marginal utility.

(True/False)

4.8/5

(76)

Question 60

Showing 41 - 60 of 182

Mary,an avid gardener,plans to spend 8 hours working in her garden.It takes her 45 minutes to prune a bush and 30 minutes to fertilize a tree.If she prunes eight bushes,she will still have enough time to fertilize six trees.

The law of diminishing marginal utility indicates that the slope of the marginal utility curve is generally:

Use the following to answer question: -(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the fifth serving she eats is _____ units.

The optimal consumption rule for all goods requires the:

Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.If Faruq spends all of his income,the opportunity cost of one taco equals _____ milkshakes.

George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).If the price of a doughnut is $1 and the price of coffee is $2.50,his budget constraint can be expressed as:

Which good is MOST likely to display increasing marginal utility over some range?

Which statement is FALSE?

When a consumer maximizes utility,the marginal utility from the last dollar spent on all goods and services in the consumption bundle must be the same.This is referred to as:

Use the following to answer question: -(Table: Utility from Candy Bars and Sodas)Use Table: Utility from Candy Bars and Sodas.If Stan consumes two candy bars and two sodas,his total utility will be _____ utils.

Use the following to answer question: -(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Given the information provided,the price of each cup of coffee is _ and the price of each gallon of gasoline is _.

Mikaela is buying a new motorcycle.She has narrowed her choices to a BMW Classic Montauk or a Honda Valkyrie Rune.She likes the Honda exactly twice as much,but it costs about 40% more.If both bikes are in her budget,she should buy the Honda.

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

At Frankie's Buy-the-Slice Pizza,Bill eats three slices of pizza and then realizes that he enjoyed the second slice more than the third.Even though the price per slice is just $1,the utility-maximizing decision is to quit eating now since Bill has reached diminishing marginal utility.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 10: The Rational Consumer

Mary,an avid gardener,plans to spend 8 hours working in her garden.It takes her 45 minutes to prune a bush and 30 minutes to fertilize a tree.If she prunes eight bushes,she will still have enough time to fertilize six trees.

The law of diminishing marginal utility indicates that the slope of the marginal utility curve is generally:

Use the following to answer question: -(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the fifth serving she eats is _____ units.

The optimal consumption rule for all goods requires the:

Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.If Faruq spends all of his income,the opportunity cost of one taco equals _____ milkshakes.

George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).If the price of a doughnut is $1 and the price of coffee is $2.50,his budget constraint can be expressed as:

Which good is MOST likely to display increasing marginal utility over some range?

Which statement is FALSE?

When a consumer maximizes utility,the marginal utility from the last dollar spent on all goods and services in the consumption bundle must be the same.This is referred to as:

Use the following to answer question: -(Table: Utility from Candy Bars and Sodas)Use Table: Utility from Candy Bars and Sodas.If Stan consumes two candy bars and two sodas,his total utility will be _____ utils.

Use the following to answer question: -(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Given the information provided,the price of each cup of coffee is _____ and the price of each gallon of gasoline is _____.

Mikaela is buying a new motorcycle.She has narrowed her choices to a BMW Classic Montauk or a Honda Valkyrie Rune.She likes the Honda exactly twice as much,but it costs about 40% more.If both bikes are in her budget,she should buy the Honda.

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

At Frankie's Buy-the-Slice Pizza,Bill eats three slices of pizza and then realizes that he enjoyed the second slice more than the third.Even though the price per slice is just $1,the utility-maximizing decision is to quit eating now since Bill has reached diminishing marginal utility.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Use the following to answer question: -(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Given the information provided,the price of each cup of coffee is _ and the price of each gallon of gasoline is _.