Question 1

As Sean's consumption of rice goes up, his

Accepted Answer

A)  average utility from consuming rice increases. 
B)  total utility from consuming rice increases. 
C)  marginal utility from consuming rice increases. 
D)  elasticity of utility from consuming rice increases. 
A)  average utility from consuming rice increases. 
B)  total utility from consuming rice increases. 
C)  marginal utility from consuming rice increases. 
D)  elasticity of utility from consuming rice increases.

Question 2

Using marginal utility theory, when the price of a gallon of milk falls, a consumer will buy

Accepted Answer

A)  the same amount of milk as before and buy more of all other goods. 
B)  more milk. 
C)  more milk only if its marginal utility is increasing. 
D)  more milk only if its marginal utility is constant. 
A)  the same amount of milk as before and buy more of all other goods. 
B)  more milk. 
C)  more milk only if its marginal utility is increasing. 
D)  more milk only if its marginal utility is constant.

Question 3

Jeremiah spends all of his income on oranges and cookies, which are normal goods. If Jeremiah's income decreases, he will buy ________ oranges and ________ cookies. His marginal utility from oranges will ________ and his marginal utility from cookies will ________.

Accepted Answer

A)  fewer; fewer; decrease; increase 
B)  more; more; decrease; decrease 
C)  the same quantity of; fewer; remain constant; decrease 
D)  fewer; fewer; increase; increase 
A)  fewer; fewer; decrease; increase 
B)  more; more; decrease; decrease 
C)  the same quantity of; fewer; remain constant; decrease 
D)  fewer; fewer; increase; increase

Question 4

As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility

Accepted Answer

A)  increases at a constant rate. 
B)  increases at a decreasing rate. 
C)  increases at an increasing rate. 
D)  decreases. 
A)  increases at a constant rate. 
B)  increases at a decreasing rate. 
C)  increases at an increasing rate. 
D)  decreases.

Question 5

-The table above gives Jessie's marginal utility and total utility from tacos. Complete the table.

Accepted Answer

@#IMG-DLM& The compl

Question 6

-Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for pizza and marginal utility for DVDs. Suppose the price of a pizza is $10 and the price of a DVD is $10 and Lisa initially has $40 to spend on the two goods. Lisa gets a raise at work and so she now has $60 to spend on DVDs and pizza. With her increase in income, her consumption of DVDs ________ and hence DVDs are ________ good for Lisa.

Accepted Answer

A)  rises; a normal 
B)  rises; an inferior 
C)  falls; a normal 
D)  falls; an inferior 
A)  rises; a normal 
B)  rises; an inferior 
C)  falls; a normal 
D)  falls; an inferior

Question 7

Liz loves to eat popcorn. Still, the more she eats, the less she wants each additional bite. Her marginal utility from popcorn is

Accepted Answer

A)  diminishing. 
B)  negative. 
C)  increasing. 
D)  zero. 
A)  diminishing. 
B)  negative. 
C)  increasing. 
D)  zero.

Question 8

Which of the following statements is true?

Accepted Answer

A)  Marginal utility theory predicts that an increase in a consumer's income increases consumption of all goods. 
B)  It is possible to derive the law of demand - that a higher price decreases the quantity demanded - using marginal utility theory. 
C)  Marginal utility theory makes no prediction about a consumer's responses to hikes in the prices of the goods and services he or she consumes. 
D)  Marginal utility theory predicts that all goods are normal goods and that all goods are substitutes for each other. 
A)  Marginal utility theory predicts that an increase in a consumer's income increases consumption of all goods. 
B)  It is possible to derive the law of demand - that a higher price decreases the quantity demanded - using marginal utility theory. 
C)  Marginal utility theory makes no prediction about a consumer's responses to hikes in the prices of the goods and services he or she consumes. 
D)  Marginal utility theory predicts that all goods are normal goods and that all goods are substitutes for each other.

Question 9

-The above table shows Homer's utility from boxes of doughnuts. As Homer's consumption of doughnuts increases, his

Accepted Answer

A)  marginal utility is positive and increasing. 
B)  marginal utility is positive but decreasing. 
C)  marginal utility is negative but increasing. 
D)  marginal utility is negative and decreasing. 
A)  marginal utility is positive and increasing. 
B)  marginal utility is positive but decreasing. 
C)  marginal utility is negative but increasing. 
D)  marginal utility is negative and decreasing.

Question 10

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from additional Mt. Dews is

Accepted Answer

A)  diminishing. 
B)  increasing. 
C)  constant. 
D)  negative. 
A)  diminishing. 
B)  increasing. 
C)  constant. 
D)  negative.

Question 11

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will

Accepted Answer

A)  decrease the number of sodas bought and the demand curve for sodas will shift leftward. 
B)  decrease the number of sodas bought and move along the demand curve for soda. 
C)  buy more pizza and move along the demand curve for pizza. 
D)  buy less pizza and the demand curve for pizza will shift leftward. 
A)  decrease the number of sodas bought and the demand curve for sodas will shift leftward. 
B)  decrease the number of sodas bought and move along the demand curve for soda. 
C)  buy more pizza and move along the demand curve for pizza. 
D)  buy less pizza and the demand curve for pizza will shift leftward.

Question 12

The fact that rubies are more expensive than milk reflects the fact that for most consumers,

Accepted Answer

A)  the total utility from rubies exceeds that from milk. 
B)  the marginal utility from rubies equals that from milk. 
C)  more milk is consumed than rubies. 
D)  a quart of rubies is considered to be prettier than a quart of milk. 
A)  the total utility from rubies exceeds that from milk. 
B)  the marginal utility from rubies equals that from milk. 
C)  more milk is consumed than rubies. 
D)  a quart of rubies is considered to be prettier than a quart of milk.

Question 13

Brian consumes only pizza and soda. When the price of a soda is $2 and the price of a slice of pizza is $4, Brian maximizes his utility by buying 5 sodas and 10 slices of pizza. If the marginal utility of the 5th soda is 100, then the marginal utility from the 10th slice of pizza must be ________.

Accepted Answer

A)  200 
B)  100 
C)  50 
D)  More information is needed to determine the marginal utility of the 10th slice of pizza. 
A)  200 
B)  100 
C)  50 
D)  More information is needed to determine the marginal utility of the 10th slice of pizza.

Question 14

Cookies Cake  
-The above table shows Homer's marginal utility from consuming various quantities of chocolate chip cookies and cake. The price of cookies is $2 per pound, the price of cake is $2 per slice and Homer has $12 to spend on cookies and cake. Homer will consume ________ of cookies and ________ of cake.

Accepted Answer

A)  1 pound; 5 slices 
B)  2 pounds; 4 slices 
C)  3 pounds; 3 slices 
D)  5 pounds; 2 slices 
A)  1 pound; 5 slices 
B)  2 pounds; 4 slices 
C)  3 pounds; 3 slices 
D)  5 pounds; 2 slices

Question 15

Apples Tacos  
-Total utility is maximized when the ________ for all goods.

Accepted Answer

A)  marginal utility per dollar spent is equal 
B)  marginal utilities are zero 
C)  marginal utilities are maximized 
D)  marginal utilities are negative 
A)  marginal utility per dollar spent is equal 
B)  marginal utilities are zero 
C)  marginal utilities are maximized 
D)  marginal utilities are negative

Question 16

Water is cheap and diamonds are expensive because water has a ________, and diamonds have a ________.

Accepted Answer

A)  low total utility; high total utility 
B)  low marginal utility; high marginal utility 
C)  high marginal utility; low marginal utility 
D)  low marginal utility and a low total utility; high marginal utility and a high total utility 
A)  low total utility; high total utility 
B)  low marginal utility; high marginal utility 
C)  high marginal utility; low marginal utility 
D)  low marginal utility and a low total utility; high marginal utility and a high total utility

Question 17

Pizza Pepsi  
-The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. A slice of pizza costs $4 and a can of Pepsi $2. Suppose Priscilla has $12 to spend. Which of the following leads Priscilla to switch her choices of pizza and Pepsi?

Accepted Answer

A)  an increase in the price of pizza to $6 per slice 
B)  a decrease in the price of Pepsi to $1 per can 
C)  an increase in Priscilla's income 
D)  All of the above will cause Priscilla to change her choices. 
A)  an increase in the price of pizza to $6 per slice 
B)  a decrease in the price of Pepsi to $1 per can 
C)  an increase in Priscilla's income 
D)  All of the above will cause Priscilla to change her choices.

Question 18

If Jack is a utility maximizer, shouldn't a fall in the price of popcorn cause an increase in his marginal utility of popcorn?

Accepted Answer

No. If the price of popcorn dr

Question 19

If Dana spends all her income on ice cream and Mountain Dew and her marginal utility per dollar from ice cream is greater than her marginal utility per dollar from Mountain Dew, she should buy more ice cream and less Mountain Dew.

Accepted Answer

A) True 
 B)False

Question 20

Apples Tacos  
-Emma consumes only hot dogs and hamburgers. She is at her consumer equilibrium. Hot dogs and hamburgers have the same marginal utility. Thus

Accepted Answer

A)  her total utility from all the hot dogs eaten must be the same as her total utility from all the hamburgers eaten. 
B)  the price of a hot dog and the price of a hamburger must be the same. 
C)  she must be eating the same number of hot dogs and hamburgers. 
D)  Both answers B and C are correct. 
A)  her total utility from all the hot dogs eaten must be the same as her total utility from all the hamburgers eaten. 
B)  the price of a hot dog and the price of a hamburger must be the same. 
C)  she must be eating the same number of hot dogs and hamburgers. 
D)  Both answers B and C are correct.

Exam 8: Utility and Demand

As Sean's consumption of rice goes up, his

Using marginal utility theory, when the price of a gallon of milk falls, a consumer will buy

Jeremiah spends all of his income on oranges and cookies, which are normal goods. If Jeremiah's income decreases, he will buy ________ oranges and ________ cookies. His marginal utility from oranges will ________ and his marginal utility from cookies will ________.

As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility

-The table above gives Jessie's marginal utility and total utility from tacos. Complete the table.

Liz loves to eat popcorn. Still, the more she eats, the less she wants each additional bite. Her marginal utility from popcorn is

Which of the following statements is true?

-The above table shows Homer's utility from boxes of doughnuts. As Homer's consumption of doughnuts increases, his

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from additional Mt. Dews is

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will

The fact that rubies are more expensive than milk reflects the fact that for most consumers,

Brian consumes only pizza and soda. When the price of a soda is $2 and the price of a slice of pizza is $4, Brian maximizes his utility by buying 5 sodas and 10 slices of pizza. If the marginal utility of the 5th soda is 100, then the marginal utility from the 10th slice of pizza must be ________.

Apples Tacos -Total utility is maximized when the ________ for all goods.

Water is cheap and diamonds are expensive because water has a ________, and diamonds have a ________.

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. A slice of pizza costs $4 and a can of Pepsi $2. Suppose Priscilla has $12 to spend. Which of the following leads Priscilla to switch her choices of pizza and Pepsi?

If Jack is a utility maximizer, shouldn't a fall in the price of popcorn cause an increase in his marginal utility of popcorn?

If Dana spends all her income on ice cream and Mountain Dew and her marginal utility per dollar from ice cream is greater than her marginal utility per dollar from Mountain Dew, she should buy more ice cream and less Mountain Dew.

Apples Tacos -Emma consumes only hot dogs and hamburgers. She is at her consumer equilibrium. Hot dogs and hamburgers have the same marginal utility. Thus

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

Jeremiah spends all of his income on oranges and cookies, which are normal goods. If Jeremiah's income decreases, he will buy oranges and cookies. His marginal utility from oranges will and his marginal utility from cookies will .

Water is cheap and diamonds are expensive because water has a , and diamonds have a .