Question 1

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from the 4th Mt. Dew is ________ units.

Accepted Answer

A)  75 
B)  90 
C)  15 
D)  82.5 
A)  75 
B)  90 
C)  15 
D)  82.5

Question 2

If it costs $6.00 to go to the movies and $25.00 to go to a hockey game, Tom is maximizing his utility between movies and hockey if his marginal utility of movies is 12 units and his marginal utility from hockey is 50.

Accepted Answer

A) True 
 B)False

Question 3

The paradox of value is illustrated by the fact that

Accepted Answer

A)  a pound of bread is cheaper than a pound of gold. 
B)  teens buy designer jeans. 
C)  if diamonds were free they would no longer be useful for engagement rings. 
D)  gold and diamonds occupy little space. 
A)  a pound of bread is cheaper than a pound of gold. 
B)  teens buy designer jeans. 
C)  if diamonds were free they would no longer be useful for engagement rings. 
D)  gold and diamonds occupy little space.

Question 4

"As Rob consumes more dates over the course of a day, it is likely that his marginal utility from date consumption will rise." Is the previous statement likely correct or incorrect?

Accepted Answer

The statement is incorrect. Th

Question 5

As Goldilocks consumes more gummy bears, her total utility ________ and her marginal utility from gummy bears ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 6

Marginal utility theory assumes that when Sally consume less of a good that she was previously consuming more than one unit of, her ________.

Accepted Answer

A)  total utility increases 
B)  marginal utility increases 
C)  income increases 
D)  total utility is maximized 
A)  total utility increases 
B)  marginal utility increases 
C)  income increases 
D)  total utility is maximized

Question 7

-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 8

If you exhibit endowment effect, then you

Accepted Answer

A)  decide rationally when making decisions about selling but not when making decisions about buying. 
B)  have a strong attachment to things you already own. 
C)  buy something you cannot afford. 
D)  decide rationally when making decisions about buying but not when making decisions about selling. 
A)  decide rationally when making decisions about selling but not when making decisions about buying. 
B)  have a strong attachment to things you already own. 
C)  buy something you cannot afford. 
D)  decide rationally when making decisions about buying but not when making decisions about selling.

Question 9

Let MUa and MUb stand for the marginal utilities of apples and bagels. Let Pa and Pb stand for their prices. The general necessary condition for consumer equilibrium is

Accepted Answer

A)  MUa = MUb. 
B)  MUa = MUb and Pa = Pb. 
C)  MUa/Pa = MUb/Pb. 
D)  MUa/MUb = Pb/Pa. 
A)  MUa = MUb. 
B)  MUa = MUb and Pa = Pb. 
C)  MUa/Pa = MUb/Pb. 
D)  MUa/MUb = Pb/Pa.

Question 10

Renee consumes pizza and rice. An increase in her income causes her to consume fewer pizzas and more rice. The change in pizzas consumed means that

Accepted Answer

A)  her total utility from consuming pizzas had been negative. 
B)  her marginal utility from consuming pizzas had been negative. 
C)  her marginal utility from consuming pizzas had been zero. 
D)  pizza is an inferior good for Renee. 
A)  her total utility from consuming pizzas had been negative. 
B)  her marginal utility from consuming pizzas had been negative. 
C)  her marginal utility from consuming pizzas had been zero. 
D)  pizza is an inferior good for Renee.

Question 11

-Margo buys music CDs and movies on DVDs. The table above shows her total utility from each good.
a) Draw graphs showing Margo's utility from music CDs and from movies on DVDs.
b) Compare the two utility graphs. Describe Margo's preferences.
c) Draw graphs that show Margo's marginal utility from music CDs and from movies on DVDs.
d) What do the two marginal utility graphs tell you about Margo's preferences?

Accepted Answer

@#IMG-DLM& a) The figure with the total utilities

Question 12

-Kelly's marginal utilities for magazines and packages of gummy bears are listed in the table above. What is the extra utility received by Kelly when she decides to consume 3 packages of gummy bears instead of 2 packages?

Accepted Answer

A)  20 
B)  160 
C)  180 
D)  540 
A)  20 
B)  160 
C)  180 
D)  540

Question 13

Fritos Fruit drinks  
-The table above shows the total utility from the two goods Freddy likes to consume. Suppose that Freddy has already eaten 5 bags of Fritos. If he consumes one more bag, his marginal utility will

Accepted Answer

A)  equal 40. 
B)  equal 35. 
C)  equal 15. 
D)  depend on the price of the extra bag. 
A)  equal 40. 
B)  equal 35. 
C)  equal 15. 
D)  depend on the price of the extra bag.

Question 14

Why does gold, which is a relatively nonessential item, have a higher price than water, which is essential to life?

Accepted Answer

Gold has a high price and a high margina

Question 15

-In the figure above, diminishing marginal utility is shown by

Accepted Answer

A)  total utility curve A. 
B)  total utility curve B. 
C)  total utility curve C. 
D)  all three curves. 
A)  total utility curve A. 
B)  total utility curve B. 
C)  total utility curve C. 
D)  all three curves.

Question 16

The fact that the fourth plate from the "All You Can Eat Country Buffet" generated more satisfaction than the fifth plate is an example of

Accepted Answer

A)  increasing marginal utility. 
B)  diminishing marginal utility. 
C)  diminishing total utility. 
D)  the "paradox of value." 
A)  increasing marginal utility. 
B)  diminishing marginal utility. 
C)  diminishing total utility. 
D)  the "paradox of value."

Question 17

Katie finds that the marginal utility from a compact disc is 30 and the marginal utility from a pizza is 10. The price of a compact disc is $15 and the price of a pizza is $10. In order to increase her utility, Katie should

Accepted Answer

A)  consume more compact discs and fewer pizzas. 
B)  consume fewer compact discs and more pizzas. 
C)  not change her consumption of pizza and compact discs. 
D)  consume fewer compact discs and fewer pizzas. 
A)  consume more compact discs and fewer pizzas. 
B)  consume fewer compact discs and more pizzas. 
C)  not change her consumption of pizza and compact discs. 
D)  consume fewer compact discs and fewer pizzas.

Question 18

-Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is ________ for ________ goods.

Accepted Answer

A)  as small as possible; all 
B)  equal; all 
C)  equal; normal 
D)  maximized; all 
A)  as small as possible; all 
B)  equal; all 
C)  equal; normal 
D)  maximized; all

Question 19

Apples Tacos  
-If the price of a good falls, before the amount consumed changes the marginal utility per dollar from that good

Accepted Answer

A)  decreases. 
B)  increases. 
C)  might either increase or decrease depending on whether the good is a substitute or a complement. 
D)  More information is needed to determine the answer. 
A)  decreases. 
B)  increases. 
C)  might either increase or decrease depending on whether the good is a substitute or a complement. 
D)  More information is needed to determine the answer.

Question 20

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. Bobby currently buys 6 pizzas and 2 CDs. To maximize his utility, he should

Accepted Answer

A)  buy more pizza and fewer CDs. 
B)  buy more CDs and fewer pizza. 
C)  buy more of both goods. 
D)  stay with the current combination of goods. 
A)  buy more pizza and fewer CDs. 
B)  buy more CDs and fewer pizza. 
C)  buy more of both goods. 
D)  stay with the current combination of goods.

Exam 8: Utility and Demand

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from the 4th Mt. Dew is ________ units.

If it costs $6.00 to go to the movies and $25.00 to go to a hockey game, Tom is maximizing his utility between movies and hockey if his marginal utility of movies is 12 units and his marginal utility from hockey is 50.

The paradox of value is illustrated by the fact that

"As Rob consumes more dates over the course of a day, it is likely that his marginal utility from date consumption will rise." Is the previous statement likely correct or incorrect?

As Goldilocks consumes more gummy bears, her total utility ________ and her marginal utility from gummy bears ________.

Marginal utility theory assumes that when Sally consume less of a good that she was previously consuming more than one unit of, her ________.

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

If you exhibit endowment effect, then you

Let MUa and MUb stand for the marginal utilities of apples and bagels. Let Pa and Pb stand for their prices. The general necessary condition for consumer equilibrium is

Renee consumes pizza and rice. An increase in her income causes her to consume fewer pizzas and more rice. The change in pizzas consumed means that

-Kelly's marginal utilities for magazines and packages of gummy bears are listed in the table above. What is the extra utility received by Kelly when she decides to consume 3 packages of gummy bears instead of 2 packages?

Fritos Fruit drinks -The table above shows the total utility from the two goods Freddy likes to consume. Suppose that Freddy has already eaten 5 bags of Fritos. If he consumes one more bag, his marginal utility will

Why does gold, which is a relatively nonessential item, have a higher price than water, which is essential to life?

-In the figure above, diminishing marginal utility is shown by

The fact that the fourth plate from the "All You Can Eat Country Buffet" generated more satisfaction than the fifth plate is an example of

Katie finds that the marginal utility from a compact disc is 30 and the marginal utility from a pizza is 10. The price of a compact disc is $15 and the price of a pizza is $10. In order to increase her utility, Katie should

-Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is ________ for ________ goods.

Apples Tacos -If the price of a good falls, before the amount consumed changes the marginal utility per dollar from that good

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. Bobby currently buys 6 pizzas and 2 CDs. To maximize his utility, he should

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 Goldilocks consumes more gummy bears, her total utility and her marginal utility from gummy bears .

Let MU_a and MU_b stand for the marginal utilities of apples and bagels. Let P_a and P_b stand for their prices. The general necessary condition for consumer equilibrium is

-Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is for goods.