Question 1

If MUx/Px > MUy/Py, then

Accepted Answer

A)  spending a dollar less on Y and a dollar more on X increases utility. 
B)  spending a dollar less on X and a dollar more on Y increases utility. 
C)  X is more expensive than Y. 
D)  Y is more expensive than X. 
A)  spending a dollar less on Y and a dollar more on X increases utility. 
B)  spending a dollar less on X and a dollar more on Y increases utility. 
C)  X is more expensive than Y. 
D)  Y is more expensive than X.

Question 2

Marginal utility is the ________ satisfaction gained by consuming ________ of a good.

Accepted Answer

A)  total; all units 
B)  total; one more unit 
C)  additional; all units 
D)  additional; one more unit 
A)  total; all units 
B)  total; one more unit 
C)  additional; all units 
D)  additional; one more unit

Question 3

Refer to the information provided in Table 6.3 below to answer the question(s) that follow.
Table 6.3
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Dozens of Oysters } \
\text { per Day }
\end{array} & \text { Total Utility } & \text { Marginal Utility } \
\hline 1 & 60 & \
\hline 2 & 104 & \
\hline 3 & 134 & \
\hline 4 & 152 & 8 \
\hline 5 & & \
\hline \begin{array} { c } 
\text { Number of } \
\text { Beersper Day }
\end{array} & \text { Total Utility } & \text { Marginal Utility } \
\hline 1 & 40 & \
\hline 2 & 70 & \
\hline 3 & 94 & \
\hline 4 & 114 & \
\hline 5 & & 14 \
\hline
\end{array}$$
-Refer to Table 6.3. Assume that a store is giving oysters and beers away for free. Consumers can have as many beers and oysters (by the dozen) as they want, but the food has to be consumed one unit at a time. If Tyler has already had one beer and two dozen oysters, then Tyler should

Accepted Answer

A)  next consume a beer to maximize his utility. 
B)  next consume a dozen oysters to maximize his utility. 
C)  be indifferent between consuming the second beer or the third dozen oysters. 
D)  consume neither another beer nor another dozen oysters to maximize his utility. 
A)  next consume a beer to maximize his utility. 
B)  next consume a dozen oysters to maximize his utility. 
C)  be indifferent between consuming the second beer or the third dozen oysters. 
D)  consume neither another beer nor another dozen oysters to maximize his utility.

Question 4

Refer to the information provided in Table 6.3 below to answer the question(s) that follow.
Table 6.3
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Dozens of Oysters } \
\text { per Day }
\end{array} & \text { Total Utility } & \text { Marginal Utility } \
\hline 1 & 60 & \
\hline 2 & 104 & \
\hline 3 & 134 & \
\hline 4 & 152 & 8 \
\hline 5 & & \
\hline \begin{array} { c } 
\text { Number of } \
\text { Beersper Day }
\end{array} & \text { Total Utility } & \text { Marginal Utility } \
\hline 1 & 40 & \
\hline 2 & 70 & \
\hline 3 & 94 & \
\hline 4 & 114 & \
\hline 5 & & 14 \
\hline
\end{array}$$
-Refer to Table 6.3. If the price of a beer is $4, the price of a dozen oysters is $12, and Tyler has $28 of income, Tyler's utility-maximizing combination of beers and oysters per day is

Accepted Answer

A)  1 beer and 2 dozen oysters. 
B)  4 beers and 1 dozen oysters. 
C)  3 beers and 1.5 dozen oysters. 
D)  indeterminate from this information. 
A)  1 beer and 2 dozen oysters. 
B)  4 beers and 1 dozen oysters. 
C)  3 beers and 1.5 dozen oysters. 
D)  indeterminate from this information.

Question 5

Refer to the information provided in Figure 6.9 below to answer the question(s) that follow.   Figure 6.9
-Refer to Figure 6.9. The ________ video game rental has a marginal utility of zero.

Accepted Answer

A)  first 
B)  second 
C)  third 
D)  fourth 
A)  first 
B)  second 
C)  third 
D)  fourth

Question 6

Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.   Figure 6.1
-Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?

Accepted Answer

A)  A. 
B)  B. 
C)  E. 
D)  D. 
A)  A. 
B)  B. 
C)  E. 
D)  D.

Question 7

Refer to the information provided in Figure 6.10 below to answer the question(s) that follow.   Figure 6.10
-Refer to Figure 6.10. The current price of a turkey sandwich is $8. If Kyle is currently buying seven turkey sandwiches a week, he ________ maximizing utility because the marginal utility ________ than its price.

Accepted Answer

A)  is; from the seventh sandwich is greater 
B)  is; from the seventh sandwich is less 
C)  is not; gained from the seventh sandwich is less 
D)  is not; gained from the seventh sandwich is greater 
A)  is; from the seventh sandwich is greater 
B)  is; from the seventh sandwich is less 
C)  is not; gained from the seventh sandwich is less 
D)  is not; gained from the seventh sandwich is greater

Question 8

Refer to the information provided in Figure 6.14 below to answer the question(s) that follow.   Figure 6.14
-Refer to Figure 6.14. If the price of an ice cream cone is $3, Jasonʹs income is

Accepted Answer

A)  $50. 
B)  $375. 
C)  $450. 
D)  indeterminate because the price of ice cream sandwiches is not given. 
A)  $50. 
B)  $375. 
C)  $450. 
D)  indeterminate because the price of ice cream sandwiches is not given.

Question 9

An assumption underlying indifference curve analysis is that MUx/MUy ________ as less of X and more of Y is consumed.

Accepted Answer

A)  increases 
B)  decreases 
C)  remains constant 
D)  always equals one 
A)  increases 
B)  decreases 
C)  remains constant 
D)  always equals one

Question 10

Refer to the information provided in Figure 6.6 below to answer the question(s) that follow.   Figure 6.6
-Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is

Accepted Answer

A)  AD. 
B)  AO. 
C)  CD. 
D)  EF. 
A)  AD. 
B)  AO. 
C)  CD. 
D)  EF.

Question 11

Refer to the information provided in Figure 6.4 below to answer the question(s) that follow.   Figure 6.4
-Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will

Accepted Answer

A)  swivel toward AB. 
B)  remain at AC. 
C)  swivel toward AD. 
D)  The budget constraint is not depicted on the diagram. 
A)  swivel toward AB. 
B)  remain at AC. 
C)  swivel toward AD. 
D)  The budget constraint is not depicted on the diagram.

Question 12

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include ________ units of clothing and ________ units of food.

Accepted Answer

A)  20; 50 
B)  15; 70 
C)  10; 60 
D)  0; 200 
A)  20; 50 
B)  15; 70 
C)  10; 60 
D)  0; 200

Question 13

Ted has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. What is the equation for Ted's budget constraint, assuming he spends his entire budget?

Accepted Answer

A)  $30 × Clothing + $5 × Food  $600 
D)  $30 × Clothing + $5 × Food = $600 
A)  $30 × Clothing + $5 × Food  $600 
D)  $30 × Clothing + $5 × Food = $600

Question 14

Income decreases cause a decrease in a household's choice set.

Accepted Answer

A) True 
 B)False

Question 15

A rise in the price of Pepsi that causes a household to shift its purchasing pattern toward Coke and away from Pepsi is the ________ effect of a price change.

Accepted Answer

A)  income 
B)  substitution 
C)  complementary 
D)  diminishing marginal utility 
A)  income 
B)  substitution 
C)  complementary 
D)  diminishing marginal utility

Question 16

Tyrell is consuming X and Y so that he is spending his entire income and MUx/Px = 7 and MUy/Py = 7. To maximize utility, he should consume

Accepted Answer

A)  the same amount of X and Y since he is already maximizing utility. 
B)  less of both X and Y. 
C)  more X and less Y. 
D)  less X and more Y. 
A)  the same amount of X and Y since he is already maximizing utility. 
B)  less of both X and Y. 
C)  more X and less Y. 
D)  less X and more Y.

Question 17

Sonia has $2,400 a month to spend on clothing and food. The price of clothing is $60 and the price of food is $10. The clothing and food pairs in Sonia's choice set include ________ units of clothing and ________ units of food.

Accepted Answer

A)  40; 100 
B)  30; 140 
C)  20; 120 
D)  0; 400 
A)  40; 100 
B)  30; 140 
C)  20; 120 
D)  0; 400

Question 18

In the labor market, the income and substitution effects work in the same direction.

Accepted Answer

A) True 
 B)False

Question 19

A utility-maximizing consumer buys so as to make ________ for all pairs of goods.

Accepted Answer

A)  Px(MUx) = Py(MUv) 
B)  TUx/Px = TUy/Py 
C)  MUx/MUy = Px/Py 
D)  MUx = MUy 
A)  Px(MUx) = Py(MUv) 
B)  TUx/Px = TUy/Py 
C)  MUx/MUy = Px/Py 
D)  MUx = MUy

Question 20

Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.   Figure 6.5
-Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes

Accepted Answer

A)  AE. 
B)  AO. 
C)  BD. 
D)  EF. 
A)  AE. 
B)  AO. 
C)  BD. 
D)  EF.

If MU_x/P_x > MU_y/P_y, then

Marginal utility is the satisfaction gained by consuming of a good.

Refer to the information provided in Figure 6.9 below to answer the question(s) that follow. Figure 6.9 -Refer to Figure 6.9. The ________ video game rental has a marginal utility of zero.

Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1 -Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?

Refer to the information provided in Figure 6.14 below to answer the question(s) that follow. Figure 6.14 -Refer to Figure 6.14. If the price of an ice cream cone is $3, Jasonʹs income is

An assumption underlying indifference curve analysis is that MUx/MUy ________ as less of X and more of Y is consumed.

Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6 -Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is

Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4 -Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include units of clothing and units of food.

Ted has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. What is the equation for Ted's budget constraint, assuming he spends his entire budget?

Income decreases cause a decrease in a household's choice set.

A rise in the price of Pepsi that causes a household to shift its purchasing pattern toward Coke and away from Pepsi is the ________ effect of a price change.

Tyrell is consuming X and Y so that he is spending his entire income and MU_x/P_x = 7 and MU_y/P_y = 7. To maximize utility, he should consume

Sonia has $2,400 a month to spend on clothing and food. The price of clothing is $60 and the price of food is $10. The clothing and food pairs in Sonia's choice set include units of clothing and units of food.

In the labor market, the income and substitution effects work in the same direction.

A utility-maximizing consumer buys so as to make ________ for all pairs of goods.

Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5 -Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Exam 6: Household Behavior and Consumer Choice

If MUx/Px > MUy/Py, then

Marginal utility is the ________ satisfaction gained by consuming ________ of a good.

Refer to the information provided in Figure 6.9 below to answer the question(s) that follow. Figure 6.9 -Refer to Figure 6.9. The ________ video game rental has a marginal utility of zero.

Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1 -Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?

Refer to the information provided in Figure 6.14 below to answer the question(s) that follow. Figure 6.14 -Refer to Figure 6.14. If the price of an ice cream cone is $3, Jasonʹs income is

An assumption underlying indifference curve analysis is that MUx/MUy ________ as less of X and more of Y is consumed.

Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6 -Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is

Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4 -Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include ________ units of clothing and ________ units of food.

Ted has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. What is the equation for Ted's budget constraint, assuming he spends his entire budget?

Income decreases cause a decrease in a household's choice set.

A rise in the price of Pepsi that causes a household to shift its purchasing pattern toward Coke and away from Pepsi is the ________ effect of a price change.

Tyrell is consuming X and Y so that he is spending his entire income and MUx/Px = 7 and MUy/Py = 7. To maximize utility, he should consume

Sonia has $2,400 a month to spend on clothing and food. The price of clothing is $60 and the price of food is $10. The clothing and food pairs in Sonia's choice set include ________ units of clothing and ________ units of food.

In the labor market, the income and substitution effects work in the same direction.

A utility-maximizing consumer buys so as to make ________ for all pairs of goods.

Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5 -Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

If MU_x/P_x > MU_y/P_y, then

Marginal utility is the satisfaction gained by consuming of a good.

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include units of clothing and units of food.

Tyrell is consuming X and Y so that he is spending his entire income and MU_x/P_x = 7 and MU_y/P_y = 7. To maximize utility, he should consume

Sonia has $2,400 a month to spend on clothing and food. The price of clothing is $60 and the price of food is $10. The clothing and food pairs in Sonia's choice set include units of clothing and units of food.