Question 1

The law of diminishing marginal utility

Accepted Answer

A) is valid only after basic necessities (such as food and shelter)have been obtained 
B) says that marginal utility decreases as more of a good is consumed 
C) implies that spending on a good will decrease as more of that good is consumed 
D) says that marginal utility decreases as income increases 
E) implies that spending on a good decreases as income increases 
A) is valid only after basic necessities (such as food and shelter)have been obtained 
B) says that marginal utility decreases as more of a good is consumed 
C) implies that spending on a good will decrease as more of that good is consumed 
D) says that marginal utility decreases as income increases 
E) implies that spending on a good decreases as income increases

Question 2

The market demand curve for a particular good

Accepted Answer

A) may be horizontal even if the individual consumers' demand curves are downward sloping 
B) will always shift to the right as the price of the good decreases 
C) is even more likely to be downward sloping than an individual consumer's demand curve 
D) will always shift to the right if consumers' incomes increase 
E) must be flatter than the flattest of the individual consumer demand curves 
A) may be horizontal even if the individual consumers' demand curves are downward sloping 
B) will always shift to the right as the price of the good decreases 
C) is even more likely to be downward sloping than an individual consumer's demand curve 
D) will always shift to the right if consumers' incomes increase 
E) must be flatter than the flattest of the individual consumer demand curves

Question 3

A technological change that enables a student to learn more French in the same amount of study time

Accepted Answer

A) causes the budget line to rotate inward 
B) causes an outward,parallel shift of the budget line 
C) shifts the "demand curve" inward 
D) is equivalent to a increase in the "price" of an hour spent studying French 
E) makes the student better off 
A) causes the budget line to rotate inward 
B) causes an outward,parallel shift of the budget line 
C) shifts the "demand curve" inward 
D) is equivalent to a increase in the "price" of an hour spent studying French 
E) makes the student better off

Question 4

-Which panel in Figure 6-2 shows the effect of an increase in the price of oranges,other things constant?

Accepted Answer

A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) panel e 
A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) panel e

Question 5

Economists usually assume

Accepted Answer

A) that Americans' preferences are systematically different from Europeans 
B) that there are some features common to the preferences of a wide variety of people 
C) that everyone has the same preferences 
D) that everyone has the same preferences that they (the economists)do 
E) that individuals prefer to purchases goods rather than services 
A) that Americans' preferences are systematically different from Europeans 
B) that there are some features common to the preferences of a wide variety of people 
C) that everyone has the same preferences 
D) that everyone has the same preferences that they (the economists)do 
E) that individuals prefer to purchases goods rather than services

Question 6

If MUₓ/Pₓ exceeds MUᵧ/Pᵧ,then the consumer should

Accepted Answer

A) consume more of good X and less of good Y 
B) consume less of good X and more of good Y 
C) consume less of both goods X and Y 
D) not change the consumption levels of X and Y 
E) consume more of good Z 
A) consume more of good X and less of good Y 
B) consume less of good X and more of good Y 
C) consume less of both goods X and Y 
D) not change the consumption levels of X and Y 
E) consume more of good Z

Question 7

A family on a trip budgets $800 for restaurant meals and fast food.The family can buy 16 restaurant meals if they don't buy any fast food.What is the price of a fast-food meal for the family?

Accepted Answer

A) $5 
B) $16 
C) $20 
D) $50 
E) it is impossible to tell from the information given 
A) $5 
B) $16 
C) $20 
D) $50 
E) it is impossible to tell from the information given

Question 8

Higher education is a normal good.If its price falls,

Accepted Answer

A) the quantity of higher education demanded will fall 
B) the substitution and income effects work in opposite directions 
C) the income effect is negative 
D) higher education will satisfy to the law of demand 
E) real purchasing power will fall 
A) the quantity of higher education demanded will fall 
B) the substitution and income effects work in opposite directions 
C) the income effect is negative 
D) higher education will satisfy to the law of demand 
E) real purchasing power will fall

Question 9

For a normal good,such as steak,

Accepted Answer

A) quantity demanded increases as its price falls. 
B) the income and substitution effects work in opposite directions 
C) the income effect is negative 
D) the income effect reinforces the substitution effect 
E) the supply curve is vertical 
A) quantity demanded increases as its price falls. 
B) the income and substitution effects work in opposite directions 
C) the income effect is negative 
D) the income effect reinforces the substitution effect 
E) the supply curve is vertical

Question 10

The combination of two goods at which total utility is maximized must lie somewhere on the consumer's budget line.

Accepted Answer

A) True 
 B)False

Question 11

Consuming to the point where the marginal utility of each good is equal to the price of that good is consistent with utility maximization.

Accepted Answer

A) True 
 B)False

Question 12

The principle of diminishing marginal utility implies that total utility falls as consumption rises above a certain level.

Accepted Answer

A) True 
 B)False

Question 13

If Sally maximizes her total utility by allocating time between two different activities,she will select the combination at which the marginal utility per hour spent is the same in both activities.

Accepted Answer

A) True 
 B)False

Question 14

Jeffrey spends all of his income on warm-up suits and running shoes,and the price of a warm-up suit is four times the price per pair of shoes.Then,in order to maximize total utility,Jeffrey should

Accepted Answer

A) buy four times as many warm-up suits as pairs of running shoes 
B) buy four times as many pairs of running shoes as warm-up suits 
C) divide his income equally between warm-up suits and running shoes 
D) buy both items until the marginal utility of a warm-up suit is four times the marginal utility of a pair of running shoes 
E) buy both items until the marginal utility of a pair of running shoes is four times the marginal utility of a warm-up suit 
A) buy four times as many warm-up suits as pairs of running shoes 
B) buy four times as many pairs of running shoes as warm-up suits 
C) divide his income equally between warm-up suits and running shoes 
D) buy both items until the marginal utility of a warm-up suit is four times the marginal utility of a pair of running shoes 
E) buy both items until the marginal utility of a pair of running shoes is four times the marginal utility of a warm-up suit

Question 15

Figure 6-1
Income = $ 100
Price per Ticket = $20
Price per Compact Disk $ 10
  
-Joe spends all of his money on concert tickets and compact disks.Figure 6-1 shows his budget constraint when his income is $100.The price of a ticket is $20,while the price of a compact disk is $10.If Joe currently buys 3 tickets and would like to purchase a fourth,his opportunity cost would be

Accepted Answer

A) 1 compact disk 
B) $20 
C) $10 
D) 2 compact disks 
E) 4 compact disks 
A) 1 compact disk 
B) $20 
C) $10 
D) 2 compact disks 
E) 4 compact disks

Question 16

Suzy spends all of her income on potato chips and textbooks.To maximize her total utility,she should

Accepted Answer

A) allocate her income so that the marginal utilities of potato chips and textbooks are equal 
B) allocate her income so that the marginal utilities per dollar spent on potato chips and textbooks are equal 
C) change her eating habits 
D) choose a consumption point that is inside her budget constraint 
E) allocate her income so that the total utilities of potato chips and textbooks are equal 
A) allocate her income so that the marginal utilities of potato chips and textbooks are equal 
B) allocate her income so that the marginal utilities per dollar spent on potato chips and textbooks are equal 
C) change her eating habits 
D) choose a consumption point that is inside her budget constraint 
E) allocate her income so that the total utilities of potato chips and textbooks are equal

Question 17

The slope of the budget line

Accepted Answer

A) is always -1 
B) represents the opportunity cost of consuming one more unit of the good measured on the horizontal axis 
C) increases as more of one good is consumed 
D) decreases as more of one good is consumed 
E) is negative because of the law of demand 
A) is always -1 
B) represents the opportunity cost of consuming one more unit of the good measured on the horizontal axis 
C) increases as more of one good is consumed 
D) decreases as more of one good is consumed 
E) is negative because of the law of demand

Question 18

A decrease in the price of a good or service

Accepted Answer

A) causes the budget line to rotate inward 
B) causes a parallel outward shift of the budget line 
C) means that less of the good can be purchased with a given income 
D) causes the budget line to rotate outward 
E) causes a parallel inward shift of the budget line 
A) causes the budget line to rotate inward 
B) causes a parallel outward shift of the budget line 
C) means that less of the good can be purchased with a given income 
D) causes the budget line to rotate outward 
E) causes a parallel inward shift of the budget line

Question 19

A family on a trip budgets $800 for sit-down restaurant meals and fast food.The family can buy 16 restaurant meals if they don't buy any fast food.What is the price of a restaurant meal for the family?

Accepted Answer

A) $5 
B) $16 
C) $20 
D) $50 
E) it is impossible to tell from the information given 
A) $5 
B) $16 
C) $20 
D) $50 
E) it is impossible to tell from the information given

Question 20

The income effect

Accepted Answer

A) of a price increase works to increase the quantity of the good demanded 
B) of a price increase works to decrease the quantity of the good demanded 
C) of a price decrease works to increase the quantity of the good demanded 
D) of a price decrease works to decrease the quantity of the good demanded 
E) of a price decrease could work to increase or decrease the quantity of the good demanded 
A) of a price increase works to increase the quantity of the good demanded 
B) of a price increase works to decrease the quantity of the good demanded 
C) of a price decrease works to increase the quantity of the good demanded 
D) of a price decrease works to decrease the quantity of the good demanded 
E) of a price decrease could work to increase or decrease the quantity of the good demanded

The law of diminishing marginal utility

The market demand curve for a particular good

A technological change that enables a student to learn more French in the same amount of study time

-Which panel in Figure 6-2 shows the effect of an increase in the price of oranges,other things constant?

Economists usually assume

If MUₓ/Pₓ exceeds MUᵧ/Pᵧ,then the consumer should

A family on a trip budgets $800 for restaurant meals and fast food.The family can buy 16 restaurant meals if they don't buy any fast food.What is the price of a fast-food meal for the family?

Higher education is a normal good.If its price falls,

For a normal good,such as steak,

The combination of two goods at which total utility is maximized must lie somewhere on the consumer's budget line.

Consuming to the point where the marginal utility of each good is equal to the price of that good is consistent with utility maximization.

The principle of diminishing marginal utility implies that total utility falls as consumption rises above a certain level.

If Sally maximizes her total utility by allocating time between two different activities,she will select the combination at which the marginal utility per hour spent is the same in both activities.

Jeffrey spends all of his income on warm-up suits and running shoes,and the price of a warm-up suit is four times the price per pair of shoes.Then,in order to maximize total utility,Jeffrey should

Suzy spends all of her income on potato chips and textbooks.To maximize her total utility,she should

The slope of the budget line

A decrease in the price of a good or service

A family on a trip budgets $800 for sit-down restaurant meals and fast food.The family can buy 16 restaurant meals if they don't buy any fast food.What is the price of a restaurant meal for the family?

The income effect

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 6: Consumer Choice

The law of diminishing marginal utility

The market demand curve for a particular good

A technological change that enables a student to learn more French in the same amount of study time

-Which panel in Figure 6-2 shows the effect of an increase in the price of oranges,other things constant?

Economists usually assume

If MUₓ/Pₓ exceeds MUᵧ/Pᵧ,then the consumer should

A family on a trip budgets $800 for restaurant meals and fast food.The family can buy 16 restaurant meals if they don't buy any fast food.What is the price of a fast-food meal for the family?

Higher education is a normal good.If its price falls,

For a normal good,such as steak,

The combination of two goods at which total utility is maximized must lie somewhere on the consumer's budget line.

Consuming to the point where the marginal utility of each good is equal to the price of that good is consistent with utility maximization.

The principle of diminishing marginal utility implies that total utility falls as consumption rises above a certain level.

If Sally maximizes her total utility by allocating time between two different activities,she will select the combination at which the marginal utility per hour spent is the same in both activities.

Jeffrey spends all of his income on warm-up suits and running shoes,and the price of a warm-up suit is four times the price per pair of shoes.Then,in order to maximize total utility,Jeffrey should

Suzy spends all of her income on potato chips and textbooks.To maximize her total utility,she should

The slope of the budget line

A decrease in the price of a good or service

A family on a trip budgets $800 for sit-down restaurant meals and fast food.The family can buy 16 restaurant meals if they don't buy any fast food.What is the price of a restaurant meal for the family?

The income effect

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters