Question 1

The market demand curve represents the total quantity demanded at each price.

Accepted Answer

A) True 
 B)False

Question 2

In Figure 5-19, the consumer experiences at point C

Accepted Answer

A) greater total utility than at point D. 
B) greater total utility than at point E. 
C) less total utility than at point D. 
D) total utility equal to that experienced at point D. 
A) greater total utility than at point D. 
B) greater total utility than at point E. 
C) less total utility than at point D. 
D) total utility equal to that experienced at point D.

Question 3

Figure 5-16 
  
-​   In Figure 5-16, Adam is

Accepted Answer

A) better off at C than at D and able to afford either C or D. 
B) better off at D than at C but only able to afford C. 
C) equally well off at C and D and able to afford either C or D. 
D) equally well off at C and D but only able to afford C. 
A) better off at C than at D and able to afford either C or D. 
B) better off at D than at C but only able to afford C. 
C) equally well off at C and D and able to afford either C or D. 
D) equally well off at C and D but only able to afford C.

Question 4

What are the properties of indifference curves?

Accepted Answer

a. Every point on an indifference curve

Question 5

If total utility declines as an additional unit of a commodity is purchased,

Accepted Answer

A) marginal utility must be rising. 
B) marginal utility is negative. 
C) marginal utility is positive but falling. 
D) its price must have risen. 
E) marginal utility is zero. 
A) marginal utility must be rising. 
B) marginal utility is negative. 
C) marginal utility is positive but falling. 
D) its price must have risen. 
E) marginal utility is zero.

Question 6

When using the terms "total utility" or "marginal utility," we assume

Accepted Answer

A) the consumer will exchange one commodity for another. 
B) the consumer will part with money for the commodity. 
C) the consumer has declined to purchase the commodity. 
D) the consumer can measure utility in exact monetary terms. 
A) the consumer will exchange one commodity for another. 
B) the consumer will part with money for the commodity. 
C) the consumer has declined to purchase the commodity. 
D) the consumer can measure utility in exact monetary terms.

Question 7

Bobby is buying slices of pizza and place a value of his utility of the first slice at $5; a second slice at $4, and a third slice at $2. If Bobby eats three slices of pizza for lunch, his total utility is equal to

Accepted Answer

A) $5 less what he had to pay. 
B) $2, since that's the marginal utility of the last slice. 
C) the marginal utility of the third slice. 
D) $11. 
A) $5 less what he had to pay. 
B) $2, since that's the marginal utility of the last slice. 
C) the marginal utility of the third slice. 
D) $11.

Question 8

When the price of a commodity rises, we can expect

Accepted Answer

A) marginal utility of the last unit purchased will rise. 
B) marginal utility of the last unit purchased will fall. 
C) marginal utility of the last unit purchased will be unaffected. 
D) purchases to rise because of the increased marginal utility. 
A) marginal utility of the last unit purchased will rise. 
B) marginal utility of the last unit purchased will fall. 
C) marginal utility of the last unit purchased will be unaffected. 
D) purchases to rise because of the increased marginal utility.

Question 9

If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer

Accepted Answer

A) is less willing to trade away a good when he has a lot of it. 
B) is more willing to trade away a good when he has a lot of it. 
C) always tries to keep the percentage of his budget spent on each good constant. 
D) views one of the goods as inferior. 
A) is less willing to trade away a good when he has a lot of it. 
B) is more willing to trade away a good when he has a lot of it. 
C) always tries to keep the percentage of his budget spent on each good constant. 
D) views one of the goods as inferior.

Question 10

The law of diminishing marginal utility holds that at some point consumption of additional units of a commodity adds less to total utility.

Accepted Answer

A) True 
 B)False

Question 11

Given the demand curve in Figure 5-24, explain how consumer's surplus is calculated.

Accepted Answer

The area under the demand curve above ma

Question 12

The marginal utility of a unit of good Y to Jane is

Accepted Answer

A) the additional utility that Jane gets from consuming one more unit of Y. 
B) defined in money terms as the minimum amount Jane is willing to pay for that additional unit of Y. 
C) defined in money terms as the maximum amount Jane is willing to pay for all the Y she buys except that additional unit. 
D) All of the responses are correct. 
A) the additional utility that Jane gets from consuming one more unit of Y. 
B) defined in money terms as the minimum amount Jane is willing to pay for that additional unit of Y. 
C) defined in money terms as the maximum amount Jane is willing to pay for all the Y she buys except that additional unit. 
D) All of the responses are correct.

Question 13

A change in the price of one good, such as staples, may affect the quantity demanded of another good, such as rubber bands.

Accepted Answer

A) True 
 B)False

Question 14

As a rule, as a consumer acquires more and more of a good, the marginal utility declines.

Accepted Answer

A) True 
 B)False

Question 15

If indifference curves and budget lines are used to analyze consumer choice, an inferior good will

Accepted Answer

A) escape detection when income rises. 
B) be easily identified because the quantity purchased will fall as income rises. 
C) be easily identified because the quantity purchased will rise as income rises. 
D) be easily identified because it will change the slope of the budget line. 
E) escape detection because this model does not show that relationship. 
A) escape detection when income rises. 
B) be easily identified because the quantity purchased will fall as income rises. 
C) be easily identified because the quantity purchased will rise as income rises. 
D) be easily identified because it will change the slope of the budget line. 
E) escape detection because this model does not show that relationship.

Question 16

Total utility can be objectively measured in numbers that indicate usefulness or benefit to the consumer.

Accepted Answer

A) True 
 B)False

Question 17

The slope of the budget line

Accepted Answer

A) always equals 1. 
B) equals income divided by price. 
C) equals the ratio of the prices. 
D) decreases as we move from left to right. 
A) always equals 1. 
B) equals income divided by price. 
C) equals the ratio of the prices. 
D) decreases as we move from left to right.

Question 18

Economic behavior is always rational.

Accepted Answer

A) True 
 B)False

Question 19

Define the following terms. Give a complete and precise definition in one sentence. 
a. 
total utility 
b. 
marginal utility 
c. 
consumer's surplus 
d. 
"law" of demand

Accepted Answer

a. 
a.Total utility of a good is the sat

Question 20

If marginal utility is a positive number,

Accepted Answer

A) the more you purchase, the more total utility you get. 
B) the more you purchase, the less total utility you get. 
C) utility is not affected by more purchases. 
D) then you are as well off as possible. 
A) the more you purchase, the more total utility you get. 
B) the more you purchase, the less total utility you get. 
C) utility is not affected by more purchases. 
D) then you are as well off as possible.

Exam 5: Consumer Choice: Individual and Market Demand

The market demand curve represents the total quantity demanded at each price.

In Figure 5-19, the consumer experiences at point C

Figure 5-16 -​ In Figure 5-16, Adam is

What are the properties of indifference curves?

If total utility declines as an additional unit of a commodity is purchased,

When using the terms "total utility" or "marginal utility," we assume

Bobby is buying slices of pizza and place a value of his utility of the first slice at $5; a second slice at $4, and a third slice at $2. If Bobby eats three slices of pizza for lunch, his total utility is equal to

When the price of a commodity rises, we can expect

If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer

The law of diminishing marginal utility holds that at some point consumption of additional units of a commodity adds less to total utility.

Given the demand curve in Figure 5-24, explain how consumer's surplus is calculated.

The marginal utility of a unit of good Y to Jane is

A change in the price of one good, such as staples, may affect the quantity demanded of another good, such as rubber bands.

As a rule, as a consumer acquires more and more of a good, the marginal utility declines.

If indifference curves and budget lines are used to analyze consumer choice, an inferior good will

Total utility can be objectively measured in numbers that indicate usefulness or benefit to the consumer.

The slope of the budget line

Economic behavior is always rational.

Define the following terms. Give a complete and precise definition in one sentence. a. total utility b. marginal utility c. consumer's surplus d. "law" of demand

If marginal utility is a positive number,

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

Filters

Figure 5-16 - In Figure 5-16, Adam is