Exam 8: Utility and Demand

-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 budget increases from $70 to $88, how many magazines does Jane purchase at her consumer equilibrium?

At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts. She spends $5 a day at the shop on 3 doughnuts and 2 cups of coffee. Is Hannah maximizing her total utility?

Sam spends all of his income on textbooks and hot dogs. The price of a textbook is $40 and the price of a hot dog is $0.50. If Sam is maximizing his utility and the marginal utility he derives from the last textbook he purchases is 400, then the marginal utility he derives from his last hot dog purchased must be

To maximize utility, why does a consumer consume the combination of goods that equates marginal utility per dollar on the different goods rather than just equating the marginal utility of the different goods?

-As shown in the above table, Sam enjoys sailing and skiing equally well. Which of the following is true?

The principle of diminishing marginal utility says that

Does the fact that diamonds are so expensive imply that the demand curve for diamonds has a positive slope? Use marginal utility theory to answer the question.

Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound. Robinson's marginal utility is 30 for the last pound of mangos purchased and 10 for the last pound of bananas. If Robinson maximizes his utility from consuming these goods, the price of bananas is

Marginal utility theory predicts that when the price of one good rises, the demand for another good is a substitute increases. This change occurs because of

At 37, actor Matthew McConaughey says he only needs "friends and family" to keep him happy and that he avoids "false drama" at all costs. How do you maintain that bod? "I don't really have a workout regimen I follow. I just live my life. My goal is to break a sweat each day." People June 25, 2007 Mr. McConaughey says he only needs friends and family and to break a sweat each day to keep him happy. The table above shows the total utility he gets from spending time with friends and family and breaking a sweat. -If Mr. McConaughey has 7 hours to spend with friends and family and breaking a sweat, he will maximize his utility if he spends:

-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?

Marginal utility theory predicts that if a consumer's income decreases, the consumer

Neuroeconomics is

Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income. His marginal utility of chocolate is 200 and his marginal utility of vanilla is 100, and the price of chocolate is $2.00 per scoop and the price of vanilla is $1.00 per scoop. Bobby has maximized his

At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts and usually buys 2 doughnuts and 1 cup of coffee. On the way to the shop, Hannah finds an extra $2 dollars in change in her car and buys an extra doughnut and cup of coffee. This means:

Tom's marginal utility of Mountain Dew exceeds his marginal utility of crackers at his consumer equilibrium. Therefore, his consumer surplus from Mountain Dew must exceed his consumer surplus from crackers.

Bags of Popcorn Bottles of soda -Sarah consumes only strawberries and cream, and she is spending all of her income. Her marginal utility of her last dish of strawberries is 200 and her marginal utility of her last pint of cream is 200. The price of strawberries is $1.00 per dish and the price of cream is $2.00 per pint. To maximize her utility, Sarah should

At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts. Currently, her marginal utility per dollar from doughnuts is 14 and her marginal utility per dollar from coffee is 14. Is Hannah maximizing her total utility?

Chips Sodas -The table above shows Mary's utility from chips and soda. Mary receives ________ units of utility from the third chip.

Liz's marginal utility for two different goods is determined by