Question 1

-The table above gives Matt's utility from consuming slices of pizza.As Matt consumes more slices of pizza, he

Accepted Answer

A) obtains greater amounts of marginal utility. 
B) obtains less total utility. 
C) has diminishing marginal utility. 
D) has diminishing total utility. 
E) has unchanging marginal utility. 
A) obtains greater amounts of marginal utility. 
B) obtains less total utility. 
C) has diminishing marginal utility. 
D) has diminishing total utility. 
E) has unchanging marginal utility.

Question 2

The magnitude of the slope of an indifference curve is the

Accepted Answer

A) marginal rate of substitution. 
B) rate of relative prices. 
C) marginal utility of substitution. 
D) marginal rate of utility of income. 
E) rate of increasing opportunity cost. 
A) marginal rate of substitution. 
B) rate of relative prices. 
C) marginal utility of substitution. 
D) marginal rate of utility of income. 
E) rate of increasing opportunity cost.

Question 3

Diminishing marginal utility means that as more of a good is consumed,

Accepted Answer

A) the price of the good rises. 
B) the price of the good falls. 
C) more income is spent. 
D) the utility of an additional unit decreases. 
E) the consumption of some other good must diminish. 
A) the price of the good rises. 
B) the price of the good falls. 
C) more income is spent. 
D) the utility of an additional unit decreases. 
E) the consumption of some other good must diminish.

Question 4

Related to the paradox of value, which of the following statements is correct?

Accepted Answer

A) The marginal utility of water is enormous but the total utility is small. 
B) We consume so much water so its marginal utility is enormous. 
C) The marginal utility of water is small but the total utility is enormous. 
D) The consumer surplus from water is small. 
E) The total utility of water is equal to the marginal utility of water. 
A) The marginal utility of water is enormous but the total utility is small. 
B) We consume so much water so its marginal utility is enormous. 
C) The marginal utility of water is small but the total utility is enormous. 
D) The consumer surplus from water is small. 
E) The total utility of water is equal to the marginal utility of water.

Question 5

The point where an indifference curve just touches the budget line at one point

Accepted Answer

A) is the best affordable point. 
B) is where the marginal rate of substitution exceeds the relative price by as much as possible. 
C) is a point on the consumer's supply of spending curve. 
D) cannot be possible because indifference curves always cross the budget line at two points. 
E) None of the above answers is correct. 
A) is the best affordable point. 
B) is where the marginal rate of substitution exceeds the relative price by as much as possible. 
C) is a point on the consumer's supply of spending curve. 
D) cannot be possible because indifference curves always cross the budget line at two points. 
E) None of the above answers is correct.

Question 6

If you consume hot dogs and hamburgers and your budget increases, while the prices of hot dogs and hamburgers do not change, then your budget line

Accepted Answer

A) does not change. 
B) shifts outward and its slope does not change. 
C) rotates outward and its slope changes. 
D) shifts inward and its slope does not change. 
E) rotates inward and its slope changes. 
A) does not change. 
B) shifts outward and its slope does not change. 
C) rotates outward and its slope changes. 
D) shifts inward and its slope does not change. 
E) rotates inward and its slope changes.

Question 7

Ricardo likes to rent videos and attend concerts.The videos cost $4 and the concerts cost $40.Ricardo's marginal utility from the last video is 20 units.Ricardo is maximizing his utility.What is his marginal utility from the last concert he attended?

Accepted Answer

The marginal utility from his last conce

Question 8

Gertrude has a $15 budget to spend on soda and crackers.Soda costs $1 per bottle and crackers cost 50¢ each.If the price of soda increases to $2 per bottle, the ________ rotates inward and there is a movement along the ________.

Accepted Answer

A) budget line; demand curve for crackers 
B) demand curve; indifference curve for crackers 
C) budget line; demand curve for soda 
D) demand curve; indifference curve for soda 
E) indifference curves; demand curve for soda 
A) budget line; demand curve for crackers 
B) demand curve; indifference curve for crackers 
C) budget line; demand curve for soda 
D) demand curve; indifference curve for soda 
E) indifference curves; demand curve for soda

Question 9

-The figure above shows a preference map for Sarah, who likes hamburgers and milk shakes.
a∙Which two combinations contain the same amount of hamburgers but different quantities of shakes?
b∙Which combination(s)does Sarah most prefer? Why?
c∙Which combination(s)does Sarah least prefer? Why?
d∙Between which combinations is Sarah indifferent? Why?

Accepted Answer

a∙Combinations a and b have the same amo

Question 10

An indifference curve is a line that shows combinations of goods among which a consumer

Accepted Answer

A) prefers one over the other. 
B) places no value on any of the items. 
C) can afford to buy all the combinations. 
D) is indifferent. 
E) believes that all combinations have the same marginal rate of substitution. 
A) prefers one over the other. 
B) places no value on any of the items. 
C) can afford to buy all the combinations. 
D) is indifferent. 
E) believes that all combinations have the same marginal rate of substitution.

Question 11

If the price of a good rises and the consumer's budget remains the same, what happens to the consumer's consumption possibilities?

Accepted Answer

The consumer's consumption possibilities

Question 12

Reb buys fishing lures and steaks.If his budget increases, the maximum number of fishing lures he can purchase ________ and the maximum number of steaks he can purchase ________.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change

Question 13

If Raul's marginal utility per dollar from bread is 25 and the marginal utility per dollar from butter is 30,

Accepted Answer

A) rail should purchase more butter and less bread to increase his total utility. 
B) Raul's marginal utility from butter will fall if he buys more butter. 
C) Raul's marginal utility from bread will rise if he buys less bread. 
D) Only answer B and answer C are correct. 
E) Answer A, answer B, and answer C are correct. 
A) rail should purchase more butter and less bread to increase his total utility. 
B) Raul's marginal utility from butter will fall if he buys more butter. 
C) Raul's marginal utility from bread will rise if he buys less bread. 
D) Only answer B and answer C are correct. 
E) Answer A, answer B, and answer C are correct.

Question 14

-"Every point on a demand curve represents a consumer equilibrium in the indifference curve model." Explain why the previous statement is correct or not.

Accepted Answer

The statement is correct.The demand curv

Question 15

If Bill's income increases from $30,000 per year to $41,000 per year.He consumes pickup trucks and lamb chops, so with his increase in budget Bill's budget line shifts outward.This increase in Bill's budget means he can consume more trucks and more lamb." Are these statements true or false? Briefly explain your answer.

Accepted Answer

The statements are true.The in

Question 16

The slope of the budget line represents an opportunity cost because, moving along the line,

Accepted Answer

A) income is increasing. 
B) income is decreasing. 
C) additional income must be earned in order to purchase more of one good. 
D) a consumer must give up some of one good in order to get more of the other. 
E) it is possible to consume more of both goods. 
A) income is increasing. 
B) income is decreasing. 
C) additional income must be earned in order to purchase more of one good. 
D) a consumer must give up some of one good in order to get more of the other. 
E) it is possible to consume more of both goods.

Question 17

-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.Ali has $14 in his budget.When Ali maximizes his utility, his total utility equals

Accepted Answer

A) 6. 
B) 9. 
C) 69. 
D) 61. 
E) None of the above answers is correct. 
A) 6. 
B) 9. 
C) 69. 
D) 61. 
E) None of the above answers is correct.

Question 18

To derive a demand curve using the indifference curve model, you must change the

Accepted Answer

A) consumer's preferences. 
B) consumer's income. 
C) price of one good, holding the price of the other good and income constant. 
D) price of both goods simultaneously but by different amounts. 
E) price of both goods simultaneously but by the same percentage. 
A) consumer's preferences. 
B) consumer's income. 
C) price of one good, holding the price of the other good and income constant. 
D) price of both goods simultaneously but by different amounts. 
E) price of both goods simultaneously but by the same percentage.

Question 19

Suppose that Misty likes pizza and hotdogs.If her marginal utility per dollar from pizza is 6 and from hotdogs it is 5, Misty

Accepted Answer

A) is maximizing her total utility. 
B) could increase her total utility by buying more hotdogs and less pizza. 
C) could increase her total utility by buying more pizza and fewer hotdogs. 
D) is maximizing her marginal utility. 
E) must obtain more income in order to reach her consumer equilibrium. 
A) is maximizing her total utility. 
B) could increase her total utility by buying more hotdogs and less pizza. 
C) could increase her total utility by buying more pizza and fewer hotdogs. 
D) is maximizing her marginal utility. 
E) must obtain more income in order to reach her consumer equilibrium.

Question 20

Which of the following statements is correct?

Accepted Answer

A) The slope of the budget line shows the opportunity cost of the good measured along the x-axis. 
B) Along the budget line, consuming more of one good implies consuming more of the other. 
C) The slope of the budget line shows there is no tradeoff between the two goods because the consumer can buy each of them. 
D) If the consumer's budget increases, the budget line shifts leftward and its slope does not change. 
E) None of the above answers is correct. 
A) The slope of the budget line shows the opportunity cost of the good measured along the x-axis. 
B) Along the budget line, consuming more of one good implies consuming more of the other. 
C) The slope of the budget line shows there is no tradeoff between the two goods because the consumer can buy each of them. 
D) If the consumer's budget increases, the budget line shifts leftward and its slope does not change. 
E) None of the above answers is correct.

-The table above gives Matt's utility from consuming slices of pizza.As Matt consumes more slices of pizza, he

The magnitude of the slope of an indifference curve is the

Diminishing marginal utility means that as more of a good is consumed,

Related to the paradox of value, which of the following statements is correct?

The point where an indifference curve just touches the budget line at one point

If you consume hot dogs and hamburgers and your budget increases, while the prices of hot dogs and hamburgers do not change, then your budget line

Ricardo likes to rent videos and attend concerts.The videos cost $4 and the concerts cost $40.Ricardo's marginal utility from the last video is 20 units.Ricardo is maximizing his utility.What is his marginal utility from the last concert he attended?

Gertrude has a $15 budget to spend on soda and crackers.Soda costs $1 per bottle and crackers cost 50¢ each.If the price of soda increases to $2 per bottle, the rotates inward and there is a movement along the .

An indifference curve is a line that shows combinations of goods among which a consumer

If the price of a good rises and the consumer's budget remains the same, what happens to the consumer's consumption possibilities?

Reb buys fishing lures and steaks.If his budget increases, the maximum number of fishing lures he can purchase and the maximum number of steaks he can purchase .

If Raul's marginal utility per dollar from bread is 25 and the marginal utility per dollar from butter is 30,

-"Every point on a demand curve represents a consumer equilibrium in the indifference curve model." Explain why the previous statement is correct or not.

The slope of the budget line represents an opportunity cost because, moving along the line,

-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.Ali has $14 in his budget.When Ali maximizes his utility, his total utility equals

To derive a demand curve using the indifference curve model, you must change the

Suppose that Misty likes pizza and hotdogs.If her marginal utility per dollar from pizza is 6 and from hotdogs it is 5, Misty

Which of the following statements is correct?

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 table above gives Matt's utility from consuming slices of pizza.As Matt consumes more slices of pizza, he

The magnitude of the slope of an indifference curve is the

Diminishing marginal utility means that as more of a good is consumed,

Related to the paradox of value, which of the following statements is correct?

The point where an indifference curve just touches the budget line at one point

If you consume hot dogs and hamburgers and your budget increases, while the prices of hot dogs and hamburgers do not change, then your budget line

Ricardo likes to rent videos and attend concerts.The videos cost $4 and the concerts cost $40.Ricardo's marginal utility from the last video is 20 units.Ricardo is maximizing his utility.What is his marginal utility from the last concert he attended?

Gertrude has a $15 budget to spend on soda and crackers.Soda costs $1 per bottle and crackers cost 50¢ each.If the price of soda increases to $2 per bottle, the ________ rotates inward and there is a movement along the ________.

An indifference curve is a line that shows combinations of goods among which a consumer

If the price of a good rises and the consumer's budget remains the same, what happens to the consumer's consumption possibilities?

Reb buys fishing lures and steaks.If his budget increases, the maximum number of fishing lures he can purchase ________ and the maximum number of steaks he can purchase ________.

If Raul's marginal utility per dollar from bread is 25 and the marginal utility per dollar from butter is 30,

-"Every point on a demand curve represents a consumer equilibrium in the indifference curve model." Explain why the previous statement is correct or not.

The slope of the budget line represents an opportunity cost because, moving along the line,

-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.Ali has $14 in his budget.When Ali maximizes his utility, his total utility equals

To derive a demand curve using the indifference curve model, you must change the

Suppose that Misty likes pizza and hotdogs.If her marginal utility per dollar from pizza is 6 and from hotdogs it is 5, Misty

Which of the following statements is correct?

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

Gertrude has a $15 budget to spend on soda and crackers.Soda costs $1 per bottle and crackers cost 50¢ each.If the price of soda increases to $2 per bottle, the rotates inward and there is a movement along the .

Reb buys fishing lures and steaks.If his budget increases, the maximum number of fishing lures he can purchase and the maximum number of steaks he can purchase .