Question 1

"Water is very inexpensive. Thus the marginal and total utility of water is small." Analyze the previous statements.

Accepted Answer

Parts of the statement are True but a ke

Question 2

Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________.

Accepted Answer

A)  supply of; increases; demand for; decreases 
B)  supply of; decreases; supply of; increases 
C)  demand for; increases; quantity demanded of; decreases 
D)  demand for; decreases; demand for; increases 
A)  supply of; increases; demand for; decreases 
B)  supply of; decreases; supply of; increases 
C)  demand for; increases; quantity demanded of; decreases 
D)  demand for; decreases; demand for; increases

Question 3

Which of the following is NOT an assumption of marginal utility theory?

Accepted Answer

A)  People derive utility from their consumption. 
B)  More consumption yields more total utility. 
C)  Marginal utility diminishes with more consumption. 
D)  Utility can be measured and the units of utility are precisely defined. 
A)  People derive utility from their consumption. 
B)  More consumption yields more total utility. 
C)  Marginal utility diminishes with more consumption. 
D)  Utility can be measured and the units of utility are precisely defined.

Question 4

Sub sandwiches Mountain Dew  
-The above table gives Sue's marginal utility schedules for sub sandwiches and Mountain Dew, the only products Sue consumes. Suppose the price of a sub sandwich is $4 each and the price of a Mountain Dew is $2 each. Sue's income is $12. If Sue is at a consumer equilibrium, she eats ________ sub sandwich(es) and drinks ________ Mountain Dews.

Accepted Answer

A)  0; 6 
B)  1; 4 
C)  2; 2 
D)  3; 0 
A)  0; 6 
B)  1; 4 
C)  2; 2 
D)  3; 0

Question 5

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What combination of milkshakes and sodas maximizes Tom's utility?

Accepted Answer

A)  5 milkshakes and 0 sodas 
B)  4 milkshakes and 2 sodas 
C)  3 milkshakes and 4 sodas 
D)  2 milkshakes and 6 sodas 
A)  5 milkshakes and 0 sodas 
B)  4 milkshakes and 2 sodas 
C)  3 milkshakes and 4 sodas 
D)  2 milkshakes and 6 sodas

Question 6

-Economists using marginal utility theory assume that consumers' objectives are to

Accepted Answer

A)  maximize their total utility. 
B)  maximize their marginal utility. 
C)  maximize their income. 
D)  none of the above 
A)  maximize their total utility. 
B)  maximize their marginal utility. 
C)  maximize their income. 
D)  none of the above

Question 7

-The above table gives some of Tammy's total and marginal utilities from comedy videos. Which of the following statements is true?

Accepted Answer

A)  Tammy's marginal utility from the third comedy video is equal to 580/3. 
B)  Tammy's total utility from five comedy videos is 800. 
C)  Tammy's marginal utility from the first comedy video is less than her marginal utility from the third comedy video. 
D)  None of the above answers are correct. 
A)  Tammy's marginal utility from the third comedy video is equal to 580/3. 
B)  Tammy's total utility from five comedy videos is 800. 
C)  Tammy's marginal utility from the first comedy video is less than her marginal utility from the third comedy video. 
D)  None of the above answers are correct.

Question 8

The Denver Broncos is a football team in the NFL, the Colorado Crush is an arena football team, and the Highlands Ranch Falcons is a local High School team. Broncos tickets cost about $415, the Crush cost between $30 and $85 and Falcons tickets are $6. What do the prices per unit tell you about the marginal utility from each of these football games?

Accepted Answer

A)  The marginal utility will be equal from each game. 
B)  The marginal utility will be greatest from a Crush game. 
C)  The marginal utility will be greatest from a Falcons game. 
D)  The marginal utility will be greatest from a Broncos game. 
A)  The marginal utility will be equal from each game. 
B)  The marginal utility will be greatest from a Crush game. 
C)  The marginal utility will be greatest from a Falcons game. 
D)  The marginal utility will be greatest from a Broncos game.

Question 9

The total utility from three skirts is

Accepted Answer

A)  three times the marginal utility of the third skirt. 
B)  three times the price of a skirt. 
C)  three skirts divided by total income. 
D)  the sum of the marginal utility of the first skirt plus the marginal utility of the second skirt plus the marginal utility of the third skirt. 
A)  three times the marginal utility of the third skirt. 
B)  three times the price of a skirt. 
C)  three skirts divided by total income. 
D)  the sum of the marginal utility of the first skirt plus the marginal utility of the second skirt plus the marginal utility of the third skirt.

Question 10

Marginal utility measures the

Accepted Answer

A)  total utility from consumption. 
B)  additional utility from an additional unit of consumption. 
C)  average utility from an additional unit of consumption. 
D)  additional cost of an additional unit of consumption. 
A)  total utility from consumption. 
B)  additional utility from an additional unit of consumption. 
C)  average utility from an additional unit of consumption. 
D)  additional cost of an additional unit of consumption.

Question 11

Pants Belts  
-Tris is shopping for pants and belts. He has a budget of $100. The price of a pair of pants is $20 and the price of a belt is $5. His marginal utility schedules are above. What combination of pants and belts does Tris buy? Explain your answer.

Accepted Answer

Tris buys 4 pairs of pants and 4 belts b

Question 12

Total utility from  
-The above table shows Sue's total utility from golf and tennis. If the price of each hour of golf is twice the price of each hour of tennis, and Sue plays four hours of tennis, then Sue plays

Accepted Answer

A)  one hour of golf. 
B)  two hours of golf. 
C)  three hours of golf. 
D)  four hours of golf. 
A)  one hour of golf. 
B)  two hours of golf. 
C)  three hours of golf. 
D)  four hours of golf.

Question 13

-Suppose that you consume only pizza and Diet Pepsi. The table above gives your utility from consuming these two goods. What is the marginal utility you get from the fourth slice of pizza?

Accepted Answer

A)  36 
B)  18 
C)  12 
D)  4 
A)  36 
B)  18 
C)  12 
D)  4

Question 14

Andy spends $30 a week on movies and magazines. The price of a movie is $8, the price of a magazine is $2, and Andy sees 3 movies a week and buys 3 magazines. The price of a magazine increases to $4 and Andy's brother gives him $6 a week so that he can still see 3 movies a week and buy 3 magazines. In this situation, Andy will see ________ movies a week and buy ________ magazines.

Accepted Answer

A)  fewer than 3; fewer than 3 
B)  3; 3 
C)  fewer than 3; more than 3 
D)  more than 3; fewer than 3 
A)  fewer than 3; fewer than 3 
B)  3; 3 
C)  fewer than 3; more than 3 
D)  more than 3; fewer than 3

Question 15

-Which of the following occur when a person maximizes utility? I. The marginal utility of each good bought is equal.
II) The highest level of utility is attained.
III) All of a person's budget is spent.

Accepted Answer

A)  I and II 
B)  I and III 
C)  II and III 
D)  I, II and III 
A)  I and II 
B)  I and III 
C)  II and III 
D)  I, II and III

Question 16

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

Accepted Answer

A)  Mary prefers sodas to chips. 
B)  Mary will consume no soda and only chips. 
C)  Mary's marginal utility decreases as she consumes more chips. 
D)  Mary's total utility decreases as she consumes more chips. 
A)  Mary prefers sodas to chips. 
B)  Mary will consume no soda and only chips. 
C)  Mary's marginal utility decreases as she consumes more chips. 
D)  Mary's total utility decreases as she consumes more chips.

Question 17

Magazines Chocolate bars  
-Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her total utility from movies will ________ and her total utility from books will ________.

Accepted Answer

A)  decrease; decrease 
B)  increase; decrease 
C)  decrease; increase 
D)  increase; increase 
A)  decrease; decrease 
B)  increase; decrease 
C)  decrease; increase 
D)  increase; increase

Question 18

Michael consumes only steak and lobster. Suppose that the price of steak rises. After Michael is back at equilibrium, compared to the situation when steak was cheaper, the marginal utility from the last steak will

Accepted Answer

A)  have increased. 
B)  not have changed. 
C)  have decreased. 
D)  not be comparable with the marginal utility before the price hike. 
A)  have increased. 
B)  not have changed. 
C)  have decreased. 
D)  not be comparable with the marginal utility before the price hike.

Question 19

Bananas Apples  
-As a person consumes more and more slices of pizza, the marginal utility of each extra slice diminishes.

Accepted Answer

A) True 
 B)False

Question 20

Utility is best defined as

Accepted Answer

A)  the amount one is willing to pay for a good. 
B)  the price of a good. 
C)  the satisfaction from consuming a good. 
D)  the practical usefulness of a good. 
A)  the amount one is willing to pay for a good. 
B)  the price of a good. 
C)  the satisfaction from consuming a good. 
D)  the practical usefulness of a good.

Exam 8: Utility and Demand

"Water is very inexpensive. Thus the marginal and total utility of water is small." Analyze the previous statements.

Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________.

Which of the following is NOT an assumption of marginal utility theory?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What combination of milkshakes and sodas maximizes Tom's utility?

-Economists using marginal utility theory assume that consumers' objectives are to

-The above table gives some of Tammy's total and marginal utilities from comedy videos. Which of the following statements is true?

The total utility from three skirts is

Marginal utility measures the

Pants Belts -Tris is shopping for pants and belts. He has a budget of $100. The price of a pair of pants is $20 and the price of a belt is $5. His marginal utility schedules are above. What combination of pants and belts does Tris buy? Explain your answer.

Total utility from -The above table shows Sue's total utility from golf and tennis. If the price of each hour of golf is twice the price of each hour of tennis, and Sue plays four hours of tennis, then Sue plays

-Suppose that you consume only pizza and Diet Pepsi. The table above gives your utility from consuming these two goods. What is the marginal utility you get from the fourth slice of pizza?

-Which of the following occur when a person maximizes utility? I. The marginal utility of each good bought is equal. II) The highest level of utility is attained. III) All of a person's budget is spent.

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

Magazines Chocolate bars -Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her total utility from movies will ________ and her total utility from books will ________.

Michael consumes only steak and lobster. Suppose that the price of steak rises. After Michael is back at equilibrium, compared to the situation when steak was cheaper, the marginal utility from the last steak will

Bananas Apples -As a person consumes more and more slices of pizza, the marginal utility of each extra slice diminishes.

Utility is best defined as

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

Marginal utility theory predicts that as the price of coffee rises, the a substitute for coffee and the coffee .

Magazines Chocolate bars -Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her total utility from movies will and her total utility from books will .