Question 1

The figure above shows one of a consumer's indifference curves.
-The marginal rate of substitution (MRS)at point C equals

Accepted Answer

A)  4. 
B)  8. 
C)  2. 
D)  1/2. 
E)  More information is needed to calculate the MRS. 
A)  4. 
B)  8. 
C)  2. 
D)  1/2. 
E)  More information is needed to calculate the MRS.

Question 2

The magnitude of the slope of an indifference curve at a particular point measures the

Accepted Answer

A)  total utility. 
B)  marginal utility. 
C)  marginal rate of substitution. 
D)  total rate of substitution. 
E)  demand. 
A)  total utility. 
B)  marginal utility. 
C)  marginal rate of substitution. 
D)  total rate of substitution. 
E)  demand.

Question 3

In the indifference curve/budget line diagram,consumers reach higher indifference curves when

Accepted Answer

A)  their budget decreases. 
B)  the price of only the good measured along the y-axis increases. 
C)  the price of only the good measured along the x-axis increases. 
D)  the price of either good falls. 
E)  the price of either good rises. 
A)  their budget decreases. 
B)  the price of only the good measured along the y-axis increases. 
C)  the price of only the good measured along the x-axis increases. 
D)  the price of either good falls. 
E)  the price of either good rises.

Question 4

In a budget line/indifference curve diagram,at the consumer's equilibrium at the best affordable point,

Accepted Answer

A)  any movement upward or downward on the budget line will move the consumer to a less preferred point. 
B)  any movement to the northeast to higher indifference curves moves the consumer to a less preferred point. 
C)  the slope of the budget line exceeds the marginal rate of substitution by as much as possible. 
D)  the budget line has a positive slope and the indifference curve has a negative slope. 
E)  the budget line has a negative slope and the indifference curve has a positive slope. 
A)  any movement upward or downward on the budget line will move the consumer to a less preferred point. 
B)  any movement to the northeast to higher indifference curves moves the consumer to a less preferred point. 
C)  the slope of the budget line exceeds the marginal rate of substitution by as much as possible. 
D)  the budget line has a positive slope and the indifference curve has a negative slope. 
E)  the budget line has a negative slope and the indifference curve has a positive slope.

Question 5

At the point where the budget line is just touching an indifference curve at one point,

Accepted Answer

A)  the slope of the budget line is equal to the slope of the indifference curve. 
B)  the marginal rate of substitution equals the relative price. 
C)  the consumer can change his or her consumption and can move to a higher indifference curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  the slope of the budget line is equal to the slope of the indifference curve. 
B)  the marginal rate of substitution equals the relative price. 
C)  the consumer can change his or her consumption and can move to a higher indifference curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 6

-The figure above shows a consumer's budget line for sodas and DVD rentals.Point a represents an

Accepted Answer

A)  affordable combination of sodas and DVDs that spends the entire budget. 
B)  affordable combination of sodas and DVDs that does not spend the entire budget. 
C)  unaffordable combination of sodas and DVDs. 
D)  affordable combination of sodas and DVDs but whether it spends the entire budget cannot be determined from the figure. 
E)  None of the above answers is correct. 
A)  affordable combination of sodas and DVDs that spends the entire budget. 
B)  affordable combination of sodas and DVDs that does not spend the entire budget. 
C)  unaffordable combination of sodas and DVDs. 
D)  affordable combination of sodas and DVDs but whether it spends the entire budget cannot be determined from the figure. 
E)  None of the above answers is correct.

Question 7

Marginal utility is equal to which of the following?

Accepted Answer

A)  total income divided by the price of the product 
B)  the change in total utility from consuming one more unit of a good 
C)  the satisfaction obtained from consuming any number of units of a good 
D)  total utility divided by the number of units of the good 
E)  None of the above answers is correct. 
A)  total income divided by the price of the product 
B)  the change in total utility from consuming one more unit of a good 
C)  the satisfaction obtained from consuming any number of units of a good 
D)  total utility divided by the number of units of the good 
E)  None of the above answers is correct.

Question 8

Why do consumers prefer higher indifference curves?

Accepted Answer

When comparing two indifference curves,i

Question 9

Bottles of Soda Slices of Pizza
  
-The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.His marginal utility from the 4th bottle of soda is

Accepted Answer

A)  21. 
B)  3. 
C)  3 units for soda ÷ 7 units for pizza. 
D)  34. 
E)  5.25. 
A)  21. 
B)  3. 
C)  3 units for soda ÷ 7 units for pizza. 
D)  34. 
E)  5.25.

Question 10

Which of the following statements is correct?

Accepted Answer

A)  Consumers have the ability to buy everything they desire. 
B)  A consumer's budget line shows the limits to what a consumer can buy. 
C)  A consumer's budget line shows the goods with the highest marginal utilities. 
D)  Rich consumers are unaffected by prices. 
E)  A budget line changes only if the person's budget changes. 
A)  Consumers have the ability to buy everything they desire. 
B)  A consumer's budget line shows the limits to what a consumer can buy. 
C)  A consumer's budget line shows the goods with the highest marginal utilities. 
D)  Rich consumers are unaffected by prices. 
E)  A budget line changes only if the person's budget changes.

Question 11

Marginal utility is the

Accepted Answer

A)  change in total utility that results from a one-unit increase in the quantity of a good consumed. 
B)  total benefit from the consumption of a good or service. 
C)  quantity of a good a consumer prefers. 
D)  average utility per unit consumed. 
E)  change in total utility that results from a one dollar increase in the price of a good consumed. 
A)  change in total utility that results from a one-unit increase in the quantity of a good consumed. 
B)  total benefit from the consumption of a good or service. 
C)  quantity of a good a consumer prefers. 
D)  average utility per unit consumed. 
E)  change in total utility that results from a one dollar increase in the price of a good consumed.

Question 12

What is the "principle of diminishing marginal utility"?

Accepted Answer

As the consumption of a good or service

Question 13

Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is

Accepted Answer

A)  decreasing. 
B)  increasing, but at a decreasing rate. 
C)  increasing at an increasing rate. 
D)  not changing. 
E)  changing but the rate of change is not certain without more information. 
A)  decreasing. 
B)  increasing, but at a decreasing rate. 
C)  increasing at an increasing rate. 
D)  not changing. 
E)  changing but the rate of change is not certain without more information.

Question 14

Bottles of Soda Slices of Pizza
  
-The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.Suppose the price of a slice of pizza increases.As a result,Ali's

Accepted Answer

A)  marginal utility per dollar from pizza decreases. 
B)  total utility increases. 
C)  purchases of pizza might increase. 
D)  marginal utility from all the slices of pizza he consumes decreases. 
E)  marginal utility per dollar from soda increases. 
A)  marginal utility per dollar from pizza decreases. 
B)  total utility increases. 
C)  purchases of pizza might increase. 
D)  marginal utility from all the slices of pizza he consumes decreases. 
E)  marginal utility per dollar from soda increases.

Question 15

"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.The

Question 16

-The table above gives Matt's utility from consuming slices of pizza.His marginal utility from the 3rd slice is

Accepted Answer

A)  27 units. 
B)  5 units. 
C)  9 units. 
D)  11 units. 
E)  None of the above answers is correct. 
A)  27 units. 
B)  5 units. 
C)  9 units. 
D)  11 units. 
E)  None of the above answers is correct.

Question 17

The fact that diamonds have a much higher price than water

Accepted Answer

A)  violates the rules of utility maximization because water is necessary for life. 
B)  does not violate the rules of utility maximization because globally, fresh water is actually very rare. 
C)  does not violate the rules of utility maximization because water's marginal utility is low. 
D)  violates the rules of utility maximization because diamonds are not necessities. 
E)  violates the rules of utility maximization because the consumer actually consumes a large amount of water. 
A)  violates the rules of utility maximization because water is necessary for life. 
B)  does not violate the rules of utility maximization because globally, fresh water is actually very rare. 
C)  does not violate the rules of utility maximization because water's marginal utility is low. 
D)  violates the rules of utility maximization because diamonds are not necessities. 
E)  violates the rules of utility maximization because the consumer actually consumes a large amount of water.

Question 18

Moving downward along a demand curve,so that the price falls and the quantity demanded increases,the marginal utility of each additional unit of the good consumed

Accepted Answer

A)  always increases. 
B)  always decreases. 
C)  stays the same. 
D)  could increase, decrease, or stay the same. 
E)  at first increases and then decreases. 
A)  always increases. 
B)  always decreases. 
C)  stays the same. 
D)  could increase, decrease, or stay the same. 
E)  at first increases and then decreases.

Question 19

-The figure above gives a consumer's budget line and two indifference curves.
a.At which point is the marginal rate of substitution greater than the relative price?
b.At which point is the marginal rate of substitution less than the relative price?
c.Which point represents the consumer equilibrium?

Accepted Answer

a.The marginal rate of substitution is g

Question 20

The figure above shows two budget lines.
-Based on the figure above,which of the following would lead the budget line to change from BL₀ to BL₁?

Accepted Answer

A)  A rise in the price of water. 
B)  A fall in the price of water. 
C)  A rise in the price of water and the price of gum. 
D)  A decrease in the consumer's budget. 
E)  An increase in the consumer's budget. 
A)  A rise in the price of water. 
B)  A fall in the price of water. 
C)  A rise in the price of water and the price of gum. 
D)  A decrease in the consumer's budget. 
E)  An increase in the consumer's budget.

The figure above shows one of a consumer's indifference curves. -The marginal rate of substitution (MRS)at point C equals

The magnitude of the slope of an indifference curve at a particular point measures the

In the indifference curve/budget line diagram,consumers reach higher indifference curves when

In a budget line/indifference curve diagram,at the consumer's equilibrium at the best affordable point,

At the point where the budget line is just touching an indifference curve at one point,

-The figure above shows a consumer's budget line for sodas and DVD rentals.Point a represents an

Marginal utility is equal to which of the following?

Why do consumers prefer higher indifference curves?

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.His marginal utility from the 4th bottle of soda is

Which of the following statements is correct?

Marginal utility is the

What is the "principle of diminishing marginal utility"?

Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.Suppose the price of a slice of pizza increases.As a result,Ali's

"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?

-The table above gives Matt's utility from consuming slices of pizza.His marginal utility from the 3rd slice is

The fact that diamonds have a much higher price than water

Moving downward along a demand curve,so that the price falls and the quantity demanded increases,the marginal utility of each additional unit of the good consumed

-The figure above gives a consumer's budget line and two indifference curves. a.At which point is the marginal rate of substitution greater than the relative price? b.At which point is the marginal rate of substitution less than the relative price? c.Which point represents the consumer equilibrium?

The figure above shows two budget lines. -Based on the figure above,which of the following would lead the budget line to change from BL₀ to BL₁?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 13: Consumer Choice and Demand

The figure above shows one of a consumer's indifference curves. -The marginal rate of substitution (MRS)at point C equals

The magnitude of the slope of an indifference curve at a particular point measures the

In the indifference curve/budget line diagram,consumers reach higher indifference curves when

In a budget line/indifference curve diagram,at the consumer's equilibrium at the best affordable point,

At the point where the budget line is just touching an indifference curve at one point,

-The figure above shows a consumer's budget line for sodas and DVD rentals.Point a represents an

Marginal utility is equal to which of the following?

Why do consumers prefer higher indifference curves?

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.His marginal utility from the 4th bottle of soda is

Which of the following statements is correct?

Marginal utility is the

What is the "principle of diminishing marginal utility"?

Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.Suppose the price of a slice of pizza increases.As a result,Ali's

"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?

-The table above gives Matt's utility from consuming slices of pizza.His marginal utility from the 3rd slice is

The fact that diamonds have a much higher price than water

Moving downward along a demand curve,so that the price falls and the quantity demanded increases,the marginal utility of each additional unit of the good consumed

-The figure above gives a consumer's budget line and two indifference curves. a.At which point is the marginal rate of substitution greater than the relative price? b.At which point is the marginal rate of substitution less than the relative price? c.Which point represents the consumer equilibrium?

The figure above shows two budget lines. -Based on the figure above,which of the following would lead the budget line to change from BL₀ to BL₁?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters