Question 1

The marginal utility per dollar spent on a good represents the

Accepted Answer

A) satisfaction received for each dollar spent on the last unit consumed 
B) total satisfaction received from consuming a certain number of units of that good 
C) dollar value of average utility 
D) change in price due to a one-unit increase in total utility 
E) price paid for the last unit of utility 
A) satisfaction received for each dollar spent on the last unit consumed 
B) total satisfaction received from consuming a certain number of units of that good 
C) dollar value of average utility 
D) change in price due to a one-unit increase in total utility 
E) price paid for the last unit of utility

Question 2

-Figure 6-6 shows the total utility that Jerry would receive from consuming different numbers of apples per week.What is Jerry's marginal utility from consuming the second apple after he already consumed the first one?

Accepted Answer

A) 0 
B) 17 
C) 20 
D) 14 
E) 34 
A) 0 
B) 17 
C) 20 
D) 14 
E) 34

Question 3

A consumer's demand curve for apples

Accepted Answer

A) is derived by varying the price of apples and determining the quantities of apples at which the marginal utility per dollar spent on apples equals the marginal utility per dollar spent on other goods 
B) is derived by determining how many apples will be purchased at different levels of income 
C) is derived by varying the prices of other goods and determining the quantities of apples at which the marginal utilities per dollar spent on all goods are equal 
D) slopes downward whenever the income and substitution effects cancel out 
E) will be vertical if the substitution effect outweighs the income effect 
A) is derived by varying the price of apples and determining the quantities of apples at which the marginal utility per dollar spent on apples equals the marginal utility per dollar spent on other goods 
B) is derived by determining how many apples will be purchased at different levels of income 
C) is derived by varying the prices of other goods and determining the quantities of apples at which the marginal utilities per dollar spent on all goods are equal 
D) slopes downward whenever the income and substitution effects cancel out 
E) will be vertical if the substitution effect outweighs the income effect

Question 4

People sometimes try to limit the options they have available.This

Accepted Answer

A) is consistent with rational economic behavior. 
B) can be explained by behavioral economic analysis 
C) explains why demand curves are sometimes vertical 
D) violates the assumption of transitive preferences 
E) occurs when income and substitution effects cancel out. 
A) is consistent with rational economic behavior. 
B) can be explained by behavioral economic analysis 
C) explains why demand curves are sometimes vertical 
D) violates the assumption of transitive preferences 
E) occurs when income and substitution effects cancel out.

Question 5

An increase in the price of a loaf of bread will

Accepted Answer

A) cause the budget constraint to rotate outward 
B) reduce the minimum number of loaves any individual consumer can purchase 
C) increase the minimum number of loaves any individual consumer can purchase 
D) increase the maximum number of loaves any individual consumer can purchase 
E) reduce the maximum number of loaves any individual consumer can purchase 
A) cause the budget constraint to rotate outward 
B) reduce the minimum number of loaves any individual consumer can purchase 
C) increase the minimum number of loaves any individual consumer can purchase 
D) increase the maximum number of loaves any individual consumer can purchase 
E) reduce the maximum number of loaves any individual consumer can purchase

Question 6

If a person could increase total utility by purchasing more candy and fewer apples,then the

Accepted Answer

A) total utility from candy must exceed the total utility from apples 
B) marginal utility of candy must exceed the marginal utility of apples 
C) marginal utility per dollar spent on candy must exceed the marginal utility per dollar spent on apples 
D) total utility per dollar spent on candy must exceed the total utility per dollar spent on apples 
E) marginal utility per dollar spent on candy must be less than the marginal utility per dollar spent on apples 
A) total utility from candy must exceed the total utility from apples 
B) marginal utility of candy must exceed the marginal utility of apples 
C) marginal utility per dollar spent on candy must exceed the marginal utility per dollar spent on apples 
D) total utility per dollar spent on candy must exceed the total utility per dollar spent on apples 
E) marginal utility per dollar spent on candy must be less than the marginal utility per dollar spent on apples

Question 7

-Figure 6-6 shows the total utility that Jerry receives from consuming different numbers of apples per week.What is his marginal utility from the fourth apple ?

Accepted Answer

A) 20 
B) 6 
C) 34 
D) 14 
E) 10 
A) 20 
B) 6 
C) 34 
D) 14 
E) 10

Question 8

A consumer's demand curve

Accepted Answer

A) shows the quantity of a good or service that individual will demand at each different price 
B) shows the quantity of a good or service that individual will demand at different levels of income 
C) is derived by equating the income and substitution effects 
D) slopes downward because the income effect offsets the substitution effect 
E) will be vertical if the income effect outweighs the substitution effect 
A) shows the quantity of a good or service that individual will demand at each different price 
B) shows the quantity of a good or service that individual will demand at different levels of income 
C) is derived by equating the income and substitution effects 
D) slopes downward because the income effect offsets the substitution effect 
E) will be vertical if the income effect outweighs the substitution effect

Question 9

The intercept of a budget line measures the

Accepted Answer

A) amount of a good that a consumer will purchase 
B) maximum amount of a good that a consumer could purchase,given his consumption of some other good 
C) maximum amount of a good that could be consumed at given prices and income 
D) minimum amount of a good that could be consumed at given prices and income 
E) minimum consumption of a good consistent with utility maximization 
A) amount of a good that a consumer will purchase 
B) maximum amount of a good that a consumer could purchase,given his consumption of some other good 
C) maximum amount of a good that could be consumed at given prices and income 
D) minimum amount of a good that could be consumed at given prices and income 
E) minimum consumption of a good consistent with utility maximization

Question 10

The Jones family is going to Disney World and has set a budget of $2000 for visiting the theme park and hotel accommodations.Their original plan was to spend three days at the park and two nights in the hotel.Mrs.Jones unexpectedly listens to a timeshare sales pitch and she is paid $400 for enduring the ordeal.The family decides to spend an extra day at the park and two extra nights in the hotel.For the Jones family,we can be certain that

Accepted Answer

A) hotels nights are an inferior good 
B) their budget line has shifted to the left 
C) theme parks days are an inferior good 
D) hotel nights are a normal good 
E) their budget line has changed its slope 
A) hotels nights are an inferior good 
B) their budget line has shifted to the left 
C) theme parks days are an inferior good 
D) hotel nights are a normal good 
E) their budget line has changed its slope

Question 11

-Suppose that a consumer's original budget line was AC in Figure 6-4,but it has now changed to line AB.Which of the following must have occurred?

Accepted Answer

A) The price of good X must have risen. 
B) The price of good Y must have risen. 
C) The price of good Y must have fallen. 
D) The price of good X must have fallen. 
E) The consumer's income must have risen. 
A) The price of good X must have risen. 
B) The price of good Y must have risen. 
C) The price of good Y must have fallen. 
D) The price of good X must have fallen. 
E) The consumer's income must have risen.

Question 12

-Which of the following most clearly illustrates the law of diminishing marginal utility?

Accepted Answer

A) The total satisfaction from consuming a good falls as more of the good is consumed. 
B) Marginal utility falls as total utility falls. 
C) The quantity of a good demanded falls as its price rises. 
D) The additional satisfaction from consuming a good falls as more of the good is consumed. 
E) There is a direct relationship between the price of a good and its total utility. 
A) The total satisfaction from consuming a good falls as more of the good is consumed. 
B) Marginal utility falls as total utility falls. 
C) The quantity of a good demanded falls as its price rises. 
D) The additional satisfaction from consuming a good falls as more of the good is consumed. 
E) There is a direct relationship between the price of a good and its total utility.

Question 13

The law of diminishing marginal utility applies to goods with negative income elasticities;it does not always apply for goods with positive income elasticities.

Accepted Answer

A) True 
 B)False

Question 14

If income and the prices of both goods all double,the budget line will

Accepted Answer

A) become flatter 
B) become steeper 
C) remain unchanged 
D) experience a parallel outward shift 
E) experience a parallel inward shift 
A) become flatter 
B) become steeper 
C) remain unchanged 
D) experience a parallel outward shift 
E) experience a parallel inward shift

Question 15

-Suppose that a consumer's original budget line was AB in Figure 6-4,but it has now changed to line AC.Which of the following must have occurred?

Accepted Answer

A) The price of good X must have risen. 
B) The price of good Y must have risen. 
C) The price of good Y must have fallen. 
D) The price of good X must have fallen. 
E) The consumer's income must have risen. 
A) The price of good X must have risen. 
B) The price of good Y must have risen. 
C) The price of good Y must have fallen. 
D) The price of good X must have fallen. 
E) The consumer's income must have risen.

Question 16

Alice has spent all of her income on ten different goods,and knows that the marginal utilities per dollar spent on the ten goods are equal.Which of the following statements is correct?

Accepted Answer

A) She could possibly increase her total utility by redistributing her income among the ten items. 
B) She has violated the assumption of rationality. 
C) The law of diminishing marginal utility does not apply to her. 
D) Any reallocation of income among the ten items will reduce her total utility. 
E) She must be at a point inside of her budget line. 
A) She could possibly increase her total utility by redistributing her income among the ten items. 
B) She has violated the assumption of rationality. 
C) The law of diminishing marginal utility does not apply to her. 
D) Any reallocation of income among the ten items will reduce her total utility. 
E) She must be at a point inside of her budget line.

Question 17

If MUₓ/Pₓ is less than MUᵧ/Pᵧ,then the consumer should consume more of X and less of Y.

Accepted Answer

A) True 
 B)False

Question 18

A decrease in the price of a good enhances the consumer's purchasing power.The income effect applies to both normal and inferior goods by encouraging the consumer to purchase more.

Accepted Answer

A) True 
 B)False

Question 19

The substitution effect measures how

Accepted Answer

A) the quantity demanded of one good is influenced by a change in income,with prices constant 
B) the quantity demanded of one good is influenced by a change the price of another good 
C) marginal utility per dollar spent is affected by income changes 
D) an increase in the price of a good is effectively the same as a reduction in income 
E) the quantity demanded of one good is influenced by a change in the price of that good,with income constant 
A) the quantity demanded of one good is influenced by a change in income,with prices constant 
B) the quantity demanded of one good is influenced by a change the price of another good 
C) marginal utility per dollar spent is affected by income changes 
D) an increase in the price of a good is effectively the same as a reduction in income 
E) the quantity demanded of one good is influenced by a change in the price of that good,with income constant

Question 20

Suppose that Janis is maximizing her total utility from chairs and tables.If the marginal utility of the last table she purchased is 200 utils,and the prices of chairs and tables are $50 and $100,respectively,then the marginal utility of the last chair she purchased

Accepted Answer

A) is 100 utils 
B) is 400 utils 
C) is 200 utils 
D) is 50 utils 
E) cannot be determined without more information 
A) is 100 utils 
B) is 400 utils 
C) is 200 utils 
D) is 50 utils 
E) cannot be determined without more information

The marginal utility per dollar spent on a good represents the

-Figure 6-6 shows the total utility that Jerry would receive from consuming different numbers of apples per week.What is Jerry's marginal utility from consuming the second apple after he already consumed the first one?

A consumer's demand curve for apples

People sometimes try to limit the options they have available.This

An increase in the price of a loaf of bread will

If a person could increase total utility by purchasing more candy and fewer apples,then the

-Figure 6-6 shows the total utility that Jerry receives from consuming different numbers of apples per week.What is his marginal utility from the fourth apple ?

A consumer's demand curve

The intercept of a budget line measures the

-Suppose that a consumer's original budget line was AC in Figure 6-4,but it has now changed to line AB.Which of the following must have occurred?

-Which of the following most clearly illustrates the law of diminishing marginal utility?

The law of diminishing marginal utility applies to goods with negative income elasticities;it does not always apply for goods with positive income elasticities.

If income and the prices of both goods all double,the budget line will

-Suppose that a consumer's original budget line was AB in Figure 6-4,but it has now changed to line AC.Which of the following must have occurred?

Alice has spent all of her income on ten different goods,and knows that the marginal utilities per dollar spent on the ten goods are equal.Which of the following statements is correct?

If MUₓ/Pₓ is less than MUᵧ/Pᵧ,then the consumer should consume more of X and less of Y.

A decrease in the price of a good enhances the consumer's purchasing power.The income effect applies to both normal and inferior goods by encouraging the consumer to purchase more.

The substitution effect measures how

Suppose that Janis is maximizing her total utility from chairs and tables.If the marginal utility of the last table she purchased is 200 utils,and the prices of chairs and tables are $50 and $100,respectively,then the marginal utility of the last chair she purchased

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 marginal utility per dollar spent on a good represents the

-Figure 6-6 shows the total utility that Jerry would receive from consuming different numbers of apples per week.What is Jerry's marginal utility from consuming the second apple after he already consumed the first one?

A consumer's demand curve for apples

People sometimes try to limit the options they have available.This

An increase in the price of a loaf of bread will

If a person could increase total utility by purchasing more candy and fewer apples,then the

-Figure 6-6 shows the total utility that Jerry receives from consuming different numbers of apples per week.What is his marginal utility from the fourth apple ?

A consumer's demand curve

The intercept of a budget line measures the

-Suppose that a consumer's original budget line was AC in Figure 6-4,but it has now changed to line AB.Which of the following must have occurred?

-Which of the following most clearly illustrates the law of diminishing marginal utility?

The law of diminishing marginal utility applies to goods with negative income elasticities;it does not always apply for goods with positive income elasticities.

If income and the prices of both goods all double,the budget line will

-Suppose that a consumer's original budget line was AB in Figure 6-4,but it has now changed to line AC.Which of the following must have occurred?

Alice has spent all of her income on ten different goods,and knows that the marginal utilities per dollar spent on the ten goods are equal.Which of the following statements is correct?

If MUₓ/Pₓ is less than MUᵧ/Pᵧ,then the consumer should consume more of X and less of Y.

A decrease in the price of a good enhances the consumer's purchasing power.The income effect applies to both normal and inferior goods by encouraging the consumer to purchase more.

The substitution effect measures how

Suppose that Janis is maximizing her total utility from chairs and tables.If the marginal utility of the last table she purchased is 200 utils,and the prices of chairs and tables are $50 and $100,respectively,then the marginal utility of the last chair she purchased

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