Exam 8: Utility and Demand

Magazines Chocolate bars -If Bobby decides that his marginal utility per dollar spent on vanilla ice cream exceeds his marginal utility per dollar spent on chocolate ice cream, he should then

Marginal utility theory shows us that water, which is very common, has a ________ marginal utility and a ________ total utility.

Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound and bananas cost $1 per pound. The marginal utility is 30 for the last pound of mangos purchased and 8 for the last pound of bananas. To maximize his utility, Robinson should buy

-When a consumer spends all of his or her income and consumes a bundle of goods such that the marginal utility per dollar from all goods is equal, then the

Fritos Fruit drinks -The table above shows the total utility from the two goods Freddy likes to consume. If Freddy has consumed 4 fruit drinks and then decides to drink another,

-From the information in the above table, what is the marginal utility of the third quart of ice cream?

-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. If Jane's total budget for magazines and CDs is $70.00 per week, what is her total utility at her utility maximizing consumer equilibrium?

Bianca consumes pizza. Marginal utility theory predicts that when the price of pizza increases,

With respect to water and diamonds, water

-Given the data in the above table, if income is $16, and the price is $1 for a bottle of water and $2 for a hamburger, what is the quantity of water and the quantity of hamburgers that will maximize the consumer's total utility?

Magazines Chocolate bars -Teddy buys only chocolate chip cookies and hot chocolate and spends all of his income on the two items. Suppose that Teddy's marginal utility per dollar from cookies exceeds that from hot chocolate. Teddy can make himself better off if he buys

Bananas Apples -If Tom's total utility from watching one more minute of television increases but the increase for each additional minute is smaller than the previous minute, he has diminishing marginal utility.

Liane maximizes her total utility when she allocates all of her available income such that the marginal utility per dollar spent on each good ________.

Jennifer consumes both apples and bread. Let P_a be the price of an apple and P_b the price of a loaf of bread. TU_a is her total utility from apples and TU_b is her total utility from bread. MU_a is her marginal utility from apples and MU_b is her marginal utility from bread. When Jennifer is in consumer equilibrium,

As more of a good is consumed, its marginal utility ________ and its total utility ________.

Marginal utility theory predicts that an increase in income means that the consumption of

-Sarah spends $100 a year on magazines and ice cream. The table above shows her utility from each good. If the price of a magazine is $5 and the price of ice cream is $5 per gallon, how does Sarah spend the $100?

You are studying with a friend, and your friend says "To maximize utility, a consumer must consume the combination of goods so that the marginal utility of good X equals the marginal utility of good Y." Explain whether your friend's statement is correct or incorrect.

-The table above gives Andy's utility from popcorn. Andy's total utility from four boxes of popcorn is

Fred spends all of his income on two goods: DVDs and downloaded music. If Fred's marginal utility per dollar from DVDs is greater than his marginal utility per dollar from downloaded music, Fred can ________ his total utility by buying ________.