Question 1

As you consume more and more of any good, you experience ________ utility.

Accepted Answer

A)  diminishing marginal 
B)  diminishing total 
C)  negative marginal 
D)  increasing marginal 
A)  diminishing marginal 
B)  diminishing total 
C)  negative marginal 
D)  increasing marginal

Question 2

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. A milkshake costs $2.00. What is the marginal utility per dollar spent when the eighth milkshake is purchased?

Accepted Answer

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

Question 3

According to a behavioral economist, people who are unwilling to sell the last pound of rice they purchased for the same price that they paid for it are displaying ________.

Accepted Answer

A)  the endowment effect 
B)  bounded rationality 
C)  bounded self-interest 
D)  bounded will power 
A)  the endowment effect 
B)  bounded rationality 
C)  bounded self-interest 
D)  bounded will power

Question 4

Marginal utility theory predicts that a rise in the price of a banana results in

Accepted Answer

A)  the demand curve for bananas shifting rightward. 
B)  the demand curve for bananas shifting leftward. 
C)  a movement upward along the demand curve for bananas. 
D)  a movement downward along the demand curve for bananas. 
A)  the demand curve for bananas shifting rightward. 
B)  the demand curve for bananas shifting leftward. 
C)  a movement upward along the demand curve for bananas. 
D)  a movement downward along the demand curve for bananas.

Question 5

Patty spends $10 a week on bagels and soda. The price of a bagel is $2 and the price of soda is $1 a can. Patty buys 2 bagels and 6 cans of soda. Her marginal utility from bagels is 20 units. The price of a bagel rises to $3 and the price of a can of soda rises to $1.50. Patty now buys ________ bagels and her marginal utility from bagels ________. She buys ________ cans of soda and her marginal utility from soda ________.

Accepted Answer

A)  fewer than 2; increases; fewer than 6; increases 
B)  2; is 20 units; 6; is 10 units 
C)  fewer than 2; is 20 units; fewer than 6; is 10 units 
D)  fewer than 2; decreases; fewer than 6; decreases 
A)  fewer than 2; increases; fewer than 6; increases 
B)  2; is 20 units; 6; is 10 units 
C)  fewer than 2; is 20 units; fewer than 6; is 10 units 
D)  fewer than 2; decreases; fewer than 6; decreases

Question 6

Shaniq buys only soda and pizza and is buying the amounts that maximize her utility. The marginal utility from a soda is 30 and the price of a soda is $2. The marginal utility from a slice of pizza is also 30. The price of a slice of pizza must be

Accepted Answer

A)  $30. 
B)  $2. 
C)  $1. 
D)  some amount that cannot be calculated without more information. 
A)  $30. 
B)  $2. 
C)  $1. 
D)  some amount that cannot be calculated without more information.

Question 7

-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. What is the marginal utility per dollar from magazines when the sixth magazine is purchased?

Accepted Answer

A)  36 units 
B)  15 units 
C)  9 units 
D)  5 units 
A)  36 units 
B)  15 units 
C)  9 units 
D)  5 units

Question 8

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 10 for the last pound of bananas. To maximize his utility, Robinson should buy

Accepted Answer

A)  more mangos and fewer bananas. 
B)  more bananas and fewer mangos. 
C)  the present combination of goods. 
D)  only mangos. 
A)  more mangos and fewer bananas. 
B)  more bananas and fewer mangos. 
C)  the present combination of goods. 
D)  only mangos.

Question 9

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones. Complete the table.

Accepted Answer

@#IMG-DLM& The compl

Question 10

-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, the price of a DVD is $5, and Lisa has $40 to spend on the two goods, what combination of pizza and DVDs will maximize her utility?

Accepted Answer

A)  6 DVDs and 1 pizza 
B)  4 DVDs and 2 pizzas 
C)  2 DVDs and 3 pizzas 
D)  5 DVDs and 4 pizzas 
A)  6 DVDs and 1 pizza 
B)  4 DVDs and 2 pizzas 
C)  2 DVDs and 3 pizzas 
D)  5 DVDs and 4 pizzas

Question 11

-Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

Accepted Answer

A)  marginal utility from cola to the marginal utility from comics 
B)  marginal utility from comics to the marginal utility from cola 
C)  number of comics Tom buys to the number of cola Tom buys 
D)  total utility from comics to the total utility from cola 
A)  marginal utility from cola to the marginal utility from comics 
B)  marginal utility from comics to the marginal utility from cola 
C)  number of comics Tom buys to the number of cola Tom buys 
D)  total utility from comics to the total utility from cola

Question 12

Total utility from  
-Marginal utility theory is used in the derivation of the

Accepted Answer

A)  negative slope of demand curves. 
B)  negative slope of supply curves. 
C)  positive slope of demand curves. 
D)  positive slope of supply curves. 
A)  negative slope of demand curves. 
B)  negative slope of supply curves. 
C)  positive slope of demand curves. 
D)  positive slope of supply curves.

Question 13

Roberta spends all of her income on two items, staplers and paper clips. If the price of a stapler increases, there will be a ________ Roberta's demand curve for staplers and a ________ Roberta's demand curve for paper clips.

Accepted Answer

A)  rightward shift of; leftward shift of 
B)  leftward shift of; movement along 
C)  movement along; rightward shift of 
D)  movement along; leftward shift of 
A)  rightward shift of; leftward shift of 
B)  leftward shift of; movement along 
C)  movement along; rightward shift of 
D)  movement along; leftward shift of

Question 14

Which of the following statements is true?

Accepted Answer

A)  As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility. 
B)  As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility. 
C)  No two people have identical utility functions, just as no two people have identical fingerprints. 
D)  Both A and C above. 
A)  As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility. 
B)  As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility. 
C)  No two people have identical utility functions, just as no two people have identical fingerprints. 
D)  Both A and C above.

Question 15

Explain the paradox of value.

Accepted Answer

The paradox of value questions why water

Question 16

-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. Becky maximizes her utility if she rents ________ DVDs per month and buys ________ movie tickets per month.

Accepted Answer

A)  6; 7 
B)  4; 8 
C)  8; 6 
D)  5; 7 
A)  6; 7 
B)  4; 8 
C)  8; 6 
D)  5; 7

Question 17

According to the paradox of value, expensive goods, such as gemstones, provide consumers with

Accepted Answer

A)  high total utility and low marginal utility. 
B)  low total utility and low marginal utility. 
C)  low total utility and high marginal utility. 
D)  high marginal utility and high total utility. 
A)  high total utility and low marginal utility. 
B)  low total utility and low marginal utility. 
C)  low total utility and high marginal utility. 
D)  high marginal utility and high total utility.

Question 18

Bags of Popcorn Bottles of soda  
-Suppose Hanna spends her entire budget buying bagels and cups of coffee each day. Also, suppose the marginal utility of her last bagel is 100 and the marginal utility of her last cup of coffee is 200. If the price of a bagel is $4 and the price of a cup of coffee is $2, then

Accepted Answer

A)  Hanna needs to decrease her consumption of bagels to maximize her utility. 
B)  Hanna needs to increase her consumption of bagels to maximize her utility. 
C)  Hanna should buy half as many bagels as coffee in order to maximize her utility. 
D)  bagels must provide more total utility than coffee. 
A)  Hanna needs to decrease her consumption of bagels to maximize her utility. 
B)  Hanna needs to increase her consumption of bagels to maximize her utility. 
C)  Hanna should buy half as many bagels as coffee in order to maximize her utility. 
D)  bagels must provide more total utility than coffee.

Question 19

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

Accepted Answer

A)  buy more chocolate ice cream and less vanilla ice cream. 
B)  buy more vanilla ice cream and less chocolate ice cream. 
C)  not change his purchases between chocolate ice cream and vanilla ice cream. 
D)  buy no chocolate ice cream. 
A)  buy more chocolate ice cream and less vanilla ice cream. 
B)  buy more vanilla ice cream and less chocolate ice cream. 
C)  not change his purchases between chocolate ice cream and vanilla ice cream. 
D)  buy no chocolate ice cream.

Question 20

The marginal utility from the first burrito Bobby consumes is larger than the marginal utility from the first taco Bobby consumes. As a result,

Accepted Answer

A)  tacos are an inferior good for Bobby. 
B)  Bobby will never consume tacos. 
C)  Bobby will consume a taco only if the price of a taco is less than the price of a burrito. 
D)  burritos and tacos are substitute goods for Bobby. 
A)  tacos are an inferior good for Bobby. 
B)  Bobby will never consume tacos. 
C)  Bobby will consume a taco only if the price of a taco is less than the price of a burrito. 
D)  burritos and tacos are substitute goods for Bobby.

Exam 8: Utility and Demand

As you consume more and more of any good, you experience ________ utility.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. A milkshake costs $2.00. What is the marginal utility per dollar spent when the eighth milkshake is purchased?

According to a behavioral economist, people who are unwilling to sell the last pound of rice they purchased for the same price that they paid for it are displaying ________.

Marginal utility theory predicts that a rise in the price of a banana results in

Shaniq buys only soda and pizza and is buying the amounts that maximize her utility. The marginal utility from a soda is 30 and the price of a soda is $2. The marginal utility from a slice of pizza is also 30. The price of a slice of pizza must be

-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. What is the marginal utility per dollar from magazines when the sixth magazine is purchased?

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 10 for the last pound of bananas. To maximize his utility, Robinson should buy

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones. Complete the table.

-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, the price of a DVD is $5, and Lisa has $40 to spend on the two goods, what combination of pizza and DVDs will maximize her utility?

-Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

Total utility from -Marginal utility theory is used in the derivation of the

Roberta spends all of her income on two items, staplers and paper clips. If the price of a stapler increases, there will be a ________ Roberta's demand curve for staplers and a ________ Roberta's demand curve for paper clips.

Which of the following statements is true?

Explain the paradox of value.

According to the paradox of value, expensive goods, such as gemstones, provide consumers with

The marginal utility from the first burrito Bobby consumes is larger than the marginal utility from the first taco Bobby consumes. As a result,

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

Roberta spends all of her income on two items, staplers and paper clips. If the price of a stapler increases, there will be a Roberta's demand curve for staplers and a Roberta's demand curve for paper clips.