Exam 5: Consumer Choice: Individual and Market Demand

A consumer possesses five pounds of bananas and values their total utility at $2.14. If one additional pound is acquired and marginal utility is 11 cents, total utility will

Vicki consumes meat loaf and pizza. To keep her utility constant, you must give her more of one good if you take some of the other away. This information implies that

If the marginal net utility of beer is negative, the consumer should buy more beer in order to increase the total utility.

An inferior good is one that consumers buy in smaller quantities when incomes rise.

If the law of demand holds, then

Figure 5-11 In Figure 5-11, a consumer is initially at point A. There is a price change and she moves to B. It follows that

A well-known women's college whose tuition lagged below similar schools found recruiting difficult and enrollment falling. A substantial tuition increase was implemented, and dormitories were soon full again. This can be explained by

Using Table 5-3, graph the marginal utility curve.

Possible causes of an upward-sloping demand curve are

An inferior good is a good whose quantity demanded

Which of the following scenarios could be an example of increasing marginal utility?

Market demand curves may slope downward even if some individual demand curves do not because

Draw the point of consumer equilibrium from an indifference map and budget line. Explain why this is the point of optimization. Be sure your diagram is fully and correctly labeled.

The marginal utility of a unit of good X

If a consumer is purchasing a good and her net marginal utility is positive,

The market demand curve

Figure 5-17 In Figure 5-17, the consumer would prefer

The resolution of Adam Smith's diamond-water puzzle is based on the distinction between marginal and total utility.

Suppose that Joan, the only consumer of pork, has a downward-sloping demand curve for pork and faces an upward-sloping supply curve. If her demand curve shifts out because she develops a craving for pork, then at the new equilibrium (everything else equal),

Total utility decreases when diminishing marginal utility is present.