Question 1

If marginal utility is positive but diminishing, then total utility must be ________ as consumption of the good increases.

Accepted Answer

A)  decreasing 
B)  positive and rising at an increasing rate 
C)  positive and rising at a decreasing rate 
D)  positive and rising at any rate 
A)  decreasing 
B)  positive and rising at an increasing rate 
C)  positive and rising at a decreasing rate 
D)  positive and rising at any rate

Question 2

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. What is the marginal utility of the eighth soda?

Accepted Answer

A)  32 units 
B)  20 units 
C)  10 units 
D)  8 units 
A)  32 units 
B)  20 units 
C)  10 units 
D)  8 units

Question 3

Diminishing marginal utility means that

Accepted Answer

A)  Ralph will enjoy his second hamburger less than the first. 
B)  the total utility from one hamburger exceeds the total utility from two hamburgers. 
C)  the price of two hamburgers is twice the price of one. 
D)  beyond a certain point, total utility decreases as income rises. 
A)  Ralph will enjoy his second hamburger less than the first. 
B)  the total utility from one hamburger exceeds the total utility from two hamburgers. 
C)  the price of two hamburgers is twice the price of one. 
D)  beyond a certain point, total utility decreases as income rises.

Question 4

Pizza CDs  
-Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Which of the following combinations of the two goods maximizes Bobby's utility?

Accepted Answer

A)  2 pizzas and 4 CDs 
B)  6 pizzas and 2 CDs 
C)  4 pizzas and 3 CDs 
D)  8 pizzas and 1 CDs 
A)  2 pizzas and 4 CDs 
B)  6 pizzas and 2 CDs 
C)  4 pizzas and 3 CDs 
D)  8 pizzas and 1 CDs

Question 5

-Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for pizza and marginal utility for DVDs. If the price of a pizza is $10 and the price of a DVD is $10 and Lisa has $60 to spend on the two goods, what combination of pizza and DVDs will maximize her utility?

Accepted Answer

A)  2 DVDs and 4 pizzas 
B)  3 DVDs and 5 pizzas 
C)  4 DVDs and 2 pizzas 
D)  3 DVDs and 3 pizzas 
A)  2 DVDs and 4 pizzas 
B)  3 DVDs and 5 pizzas 
C)  4 DVDs and 2 pizzas 
D)  3 DVDs and 3 pizzas

Question 6

Bags of Popcorn Bottles of soda  
-Shaniq has seen two movies this week and two baseball games. Her marginal utility of one more movie is 20 and her marginal utility of one more baseball game is 30. Shaniq will go to a baseball game tonight, rather than to another movie,

Accepted Answer

A)  no matter how much more the baseball game costs compared to the movie. 
B)  if the baseball game costs $10.00 and the movie costs $7.00. 
C)  if the baseball game costs $10.00 and the movie costs $5.00. 
D)  Both answers B and C are correct. 
A)  no matter how much more the baseball game costs compared to the movie. 
B)  if the baseball game costs $10.00 and the movie costs $7.00. 
C)  if the baseball game costs $10.00 and the movie costs $5.00. 
D)  Both answers B and C are correct.

Question 7

What are the two conditions that are met if a consumer is maximizing utility?

Accepted Answer

There are two conditions: (1)

Question 8

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  five 
B)  six 
C)  seven 
D)  eight 
A)  five 
B)  six 
C)  seven 
D)  eight

Question 9

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

Accepted Answer

A)  rises; rises 
B)  rises; falls 
C)  falls; rises 
D)  falls; falls 
A)  rises; rises 
B)  rises; falls 
C)  falls; rises 
D)  falls; falls

Question 10

The Paradox of Value is resolved by the willingness for an individual to pay a high price for a good or service that has a high marginal utility per dollar.

Accepted Answer

A) True 
 B)False

Question 11

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  five 
B)  six 
C)  seven 
D)  eight 
A)  five 
B)  six 
C)  seven 
D)  eight

Question 12

If Pete enjoys his first pancake of the morning much more than his fifth pancake of the morning, he is exhibiting

Accepted Answer

A)  utility maximizing behavior. 
B)  diminishing marginal utility. 
C)  irrational behavior. 
D)  diminishing total utility. 
A)  utility maximizing behavior. 
B)  diminishing marginal utility. 
C)  irrational behavior. 
D)  diminishing total utility.

Question 13

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. What is the marginal utility of Tom's eighth milkshake?

Accepted Answer

A)  32 units 
B)  20 units 
C)  16 units 
D)  10 units 
A)  32 units 
B)  20 units 
C)  16 units 
D)  10 units

Question 14

-The table above gives Jane's total utility from magazines and CDs. What is the marginal utility of the sixth CD?

Accepted Answer

A)  150 units 
B)  100 units 
C)  50 units 
D)  5 units 
A)  150 units 
B)  100 units 
C)  50 units 
D)  5 units

Question 15

Chips Sodas  
-The table above shows Mary's utility from chips and soda. The table shows that Mary has diminishing marginal utility for

Accepted Answer

A)  both chips and soda. 
B)  neither chips nor soda. 
C)  soda, but not chips. 
D)  chips, but not soda. 
A)  both chips and soda. 
B)  neither chips nor soda. 
C)  soda, but not chips. 
D)  chips, but not soda.

Question 16

-The table above gives the utility from pens and pencils. The marginal utility derived from the third pen is

Accepted Answer

A)  200. 
B)  155. 
C)  445. 
D)  45. 
A)  200. 
B)  155. 
C)  445. 
D)  45.

Question 17

Lisa is spending all of her income on compact discs and downloadable games for her smart phone. She finds that the marginal utility from the last compact disc she buys is 30 and the marginal utility from the last downloadable game is 10. The price of a compact disc is $15 and the price of a downloadable game is $5. Lisa should

Accepted Answer

A)  increase her consumption of compact discs. 
B)  increase her consumption of downloadable games. 
C)  not change her consumption of downloadable games and compact discs. 
D)  decrease the price of downloadable games. 
A)  increase her consumption of compact discs. 
B)  increase her consumption of downloadable games. 
C)  not change her consumption of downloadable games and compact discs. 
D)  decrease the price of downloadable games.

Question 18

Magazines Chocolate bars  
-Joshua consumes only apples and bread and is in consumer equilibrium. Joshua reads that eating bread is healthy, so his total utility from each loaf of bread increases. At his new consumer equilibrium Joshua would consume

Accepted Answer

A)  more apples and less bread. 
B)  fewer apples and more bread. 
C)  some combination of apples and bread corresponding to a lower ratio of the marginal utility of bread to the marginal utility of apples. 
D)  the same quantity of apples and the same quantity of bread. 
A)  more apples and less bread. 
B)  fewer apples and more bread. 
C)  some combination of apples and bread corresponding to a lower ratio of the marginal utility of bread to the marginal utility of apples. 
D)  the same quantity of apples and the same quantity of bread.

Question 19

Marginal utility

Accepted Answer

A)  characterizes things of little use. 
B)  is the additional utility derived from the last unit of a good consumed. 
C)  is an implication of the law of demand. 
D)  is always negative when total utility is positive and positive when total utility is negative. 
A)  characterizes things of little use. 
B)  is the additional utility derived from the last unit of a good consumed. 
C)  is an implication of the law of demand. 
D)  is always negative when total utility is positive and positive when total utility is negative.

Question 20

-Becky decides to spend $50 per month on DVD rentals and movie tickets. Her marginal utility schedules from these two goods are shown in the table above. The price of a DVD rental is $2.50, and the price of a movie ticket is $5. Suppose Becky rents 8 DVDs and buys 6 movie tickets per month. She

Accepted Answer

A)  cannot increase her total utility because she already gets the maximum possible utility from DVD rentals and movies within her budget. 
B)  can increase her total utility if she rents more DVDs and buys more movie tickets. 
C)  can increase her total utility if she rents more DVDs and buys fewer movie tickets. 
D)  can increase her total utility if she rents fewer DVDs and buys more movie tickets. 
A)  cannot increase her total utility because she already gets the maximum possible utility from DVD rentals and movies within her budget. 
B)  can increase her total utility if she rents more DVDs and buys more movie tickets. 
C)  can increase her total utility if she rents more DVDs and buys fewer movie tickets. 
D)  can increase her total utility if she rents fewer DVDs and buys more movie tickets.

Exam 8: Utility and Demand

If marginal utility is positive but diminishing, then total utility must be ________ as consumption of the good increases.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. What is the marginal utility of the eighth soda?

Diminishing marginal utility means that

Pizza CDs -Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Which of the following combinations of the two goods maximizes Bobby's utility?

Bags of Popcorn Bottles of soda -Shaniq has seen two movies this week and two baseball games. Her marginal utility of one more movie is 20 and her marginal utility of one more baseball game is 30. Shaniq will go to a baseball game tonight, rather than to another movie,

What are the two conditions that are met if a consumer is maximizing utility?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

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

The Paradox of Value is resolved by the willingness for an individual to pay a high price for a good or service that has a high marginal utility per dollar.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of milkshakes does Tom purchase at his consumer equilibrium?

If Pete enjoys his first pancake of the morning much more than his fifth pancake of the morning, he is exhibiting

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. What is the marginal utility of Tom's eighth milkshake?

-The table above gives Jane's total utility from magazines and CDs. What is the marginal utility of the sixth CD?

Chips Sodas -The table above shows Mary's utility from chips and soda. The table shows that Mary has diminishing marginal utility for

-The table above gives the utility from pens and pencils. The marginal utility derived from the third pen is

Magazines Chocolate bars -Joshua consumes only apples and bread and is in consumer equilibrium. Joshua reads that eating bread is healthy, so his total utility from each loaf of bread increases. At his new consumer equilibrium Joshua would consume

Marginal utility

-Becky decides to spend $50 per month on DVD rentals and movie tickets. Her marginal utility schedules from these two goods are shown in the table above. The price of a DVD rental is $2.50, and the price of a movie ticket is $5. Suppose Becky rents 8 DVDs and buys 6 movie tickets per month. She

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

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