Question 1

According to economists, the satisfaction people get from their consumption activities is called:

Accepted Answer

A) demand. 
B) utility. 
C) a need. 
D) a want. 
A) demand. 
B) utility. 
C) a need. 
D) a want.

Question 2

Sven likes to water ski, but can only water ski during the one week each year when he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's marginal utility from his first hour of skiing was ________ his marginal utility from his tenth hour of skiing.

Accepted Answer

A) less than 
B) greater than 
C) the same as 
D) more negative 
A) less than 
B) greater than 
C) the same as 
D) more negative

Question 3

Pat's total utility after eating 99 Reese's Peanut Butter Cups was greater than his total utility after eating 100 Reese's Peanut Butter Cups. Therefore, Pat's marginal utility from the 100ᵗʰ peanut butter cup was:

Accepted Answer

A) positive, but less than one. 
B) positive, but less than his marginal utility for the 99ᵗʰ peanut butter cup. 
C) zero. 
D) negative. 
A) positive, but less than one. 
B) positive, but less than his marginal utility for the 99ᵗʰ peanut butter cup. 
C) zero. 
D) negative.

Question 4

The tendency for marginal utility to decline as consumption increases beyond some point is called:

Accepted Answer

A) the law of demand. 
B) the law of diminishing marginal utility. 
C) the rational spending rule. 
D) utility maximization. 
A) the law of demand. 
B) the law of diminishing marginal utility. 
C) the rational spending rule. 
D) utility maximization.

Question 5

Sven likes to water ski, but can only water ski during the one week each year when he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. On the fifth day of Sven's vacation, he had decided that another hour of skiing would yield:

Accepted Answer

A) more utility than blueberry picking. 
B) the same level of utility as the day before. 
C) less utility than blueberry picking. 
D) no utility at all. 
A) more utility than blueberry picking. 
B) the same level of utility as the day before. 
C) less utility than blueberry picking. 
D) no utility at all.

Question 6

Consumer surplus measures:

Accepted Answer

A) the increase in a buyer's total utility when the buyer purchases additional units of a good. 
B) the difference between the quantity demanded and the quantity supplied at a given price. 
C) the difference between a buyer's marginal utility from consuming a product and the price actually paid. 
D) the difference between the most a buyer would be willing to pay for a product and the price actually paid. 
A) the increase in a buyer's total utility when the buyer purchases additional units of a good. 
B) the difference between the quantity demanded and the quantity supplied at a given price. 
C) the difference between a buyer's marginal utility from consuming a product and the price actually paid. 
D) the difference between the most a buyer would be willing to pay for a product and the price actually paid.

Question 7

When the price of a good falls, marginal utility per dollar spent on that good ________, prompting consumers to purchase ________ of that good.

Accepted Answer

A) rises; more 
B) falls; more 
C) rises; less 
D) falls; less 
A) rises; more 
B) falls; more 
C) rises; less 
D) falls; less

Question 8

The absolute price of a good in dollar terms is the good's:

Accepted Answer

A) market price. 
B) equilibrium price. 
C) nominal price. 
D) marginal price. 
A) market price. 
B) equilibrium price. 
C) nominal price. 
D) marginal price.

Question 9

Refer to the accompanying figure. Suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires cheese to be sold for a price of $8 per pound, then, relative to before the price controls, total consumer surplus in the market would:

Accepted Answer

A) increase. 
B) decrease. 
C) not change. 
D) increase and then decrease. 
A) increase. 
B) decrease. 
C) not change. 
D) increase and then decrease.

Question 10

Refer to the accompanying figure. The marginal utility of the 6ᵗʰ pizza is:

Accepted Answer

A) 95 
B) 100 
C) 5 
D) 17.5 
A) 95 
B) 100 
C) 5 
D) 17.5

Question 11

Refer to the accompanying figures. If Mallory and Rick are the only two consumers in this market, then the market demand for soda will be 90 cans per month when the price of a can of soda is ________.

Accepted Answer

A) $1.50 
B) $1.25 
C) $0.75 
D) $0.50 
A) $1.50 
B) $1.25 
C) $0.75 
D) $0.50

Question 12

Suppose Chris's marginal utility from the first taco he eats is 15, and his marginal utility from the second taco he eats is 12. One can infer that:

Accepted Answer

A) Chris's total utility from eating two tacos is 27. 
B) Chris should eat one taco. 
C) Chris's average utility from eating two tacos is 27. 
D) Chris should eat two tacos. 
A) Chris's total utility from eating two tacos is 27. 
B) Chris should eat one taco. 
C) Chris's average utility from eating two tacos is 27. 
D) Chris should eat two tacos.

Question 13

Refer to the accompanying figure. If Laura and Chris are the only two consumers in this market, then the market demand for hamburger will be 9 pounds per week when the price of hamburger is:

Accepted Answer

A) $1.00 per pound. 
B) $1.50 per pound. 
C) $2.00 per pound. 
D) $2.50 per pound. 
A) $1.00 per pound. 
B) $1.50 per pound. 
C) $2.00 per pound. 
D) $2.50 per pound.

Question 14

Suppose that at your current consumption of two goods, A and B, MUA/PA = 25 and MUB/PB = 20. In order to maximize, your utility you should:

Accepted Answer

A) leave your spending unchanged. 
B) purchase less of A and more of B. 
C) purchase more of A and less of B. 
D) purchase less of A and B. 
A) leave your spending unchanged. 
B) purchase less of A and more of B. 
C) purchase more of A and less of B. 
D) purchase less of A and B.

Question 15

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Casey can buy a maximum of ________ pounds of fish or a maximum of ________ pounds of shrimp.

Accepted Answer

A) 30; 50 
B) 50; 30 
C) 15; 30 
D) 30; 15 
A) 30; 50 
B) 50; 30 
C) 15; 30 
D) 30; 15

Question 16

During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. After the third pie, your total utility:

Accepted Answer

A) increased, but by less than for the first three pies. 
B) decreased. 
C) stayed the same. 
D) was zero. 
A) increased, but by less than for the first three pies. 
B) decreased. 
C) stayed the same. 
D) was zero.

Question 17

Alex wants to maximize his utility. At his current level of consumption, Alex's marginal utility from an additional cup of coffee is 15 utils, and his marginal utility from an additional can of soda is 11 utils. If the price of a cup of coffee is $3 and the price of a can of soda is $2, Alex should:

Accepted Answer

A) reallocate his spending away from coffee and towards soda. 
B) reallocate his spending away from soda and towards coffee. 
C) not change his consumption of either coffee or soda. 
D) decrease his spending on both coffee and soda. 
A) reallocate his spending away from coffee and towards soda. 
B) reallocate his spending away from soda and towards coffee. 
C) not change his consumption of either coffee or soda. 
D) decrease his spending on both coffee and soda.

Question 18

The term marginal utility denotes the amount by which ________ changes when consumption changes by ________ unit(s).

Accepted Answer

A) total utility; 1 
B) demand; 10 
C) demand; 1 
D) total utility; 10 
A) total utility; 1 
B) demand; 10 
C) demand; 1 
D) total utility; 10

Question 19

Refer to the accompanying figure.   Suppose Zeynep's budget constraint is initially given by BC1. If her budget constraint shifts to BC2, this could be the result of:

Accepted Answer

A) an increase in the price of cheese sandwiches and a decrease in the price of ham sandwiches. 
B) a decrease in the price of cheese sandwiches and an increase in income. 
C) a decrease in the price of cheese sandwiches and an increase in the price of ham sandwiches. 
D) an increase in the price of cheese sandwiches and a decrease in income. 
A) an increase in the price of cheese sandwiches and a decrease in the price of ham sandwiches. 
B) a decrease in the price of cheese sandwiches and an increase in income. 
C) a decrease in the price of cheese sandwiches and an increase in the price of ham sandwiches. 
D) an increase in the price of cheese sandwiches and a decrease in income.

Question 20

The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts.   At a price of $15 per unit, what would be the total consumer surplus in this market each day?

Accepted Answer

A) $0 
B) $6 
C) $15 
D) $75 
A) $0 
B) $6 
C) $15 
D) $75

Exam 5: Demand

According to economists, the satisfaction people get from their consumption activities is called:

Pat's total utility after eating 99 Reese's Peanut Butter Cups was greater than his total utility after eating 100 Reese's Peanut Butter Cups. Therefore, Pat's marginal utility from the 100ᵗʰ peanut butter cup was:

The tendency for marginal utility to decline as consumption increases beyond some point is called:

Consumer surplus measures:

When the price of a good falls, marginal utility per dollar spent on that good ________, prompting consumers to purchase ________ of that good.

The absolute price of a good in dollar terms is the good's:

Refer to the accompanying figure. Suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires cheese to be sold for a price of $8 per pound, then, relative to before the price controls, total consumer surplus in the market would:

Refer to the accompanying figure. The marginal utility of the 6ᵗʰ pizza is:

Refer to the accompanying figures. If Mallory and Rick are the only two consumers in this market, then the market demand for soda will be 90 cans per month when the price of a can of soda is ________.

Suppose Chris's marginal utility from the first taco he eats is 15, and his marginal utility from the second taco he eats is 12. One can infer that:

Refer to the accompanying figure. If Laura and Chris are the only two consumers in this market, then the market demand for hamburger will be 9 pounds per week when the price of hamburger is:

Suppose that at your current consumption of two goods, A and B, MUA/PA = 25 and MUB/PB = 20. In order to maximize, your utility you should:

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Casey can buy a maximum of ________ pounds of fish or a maximum of ________ pounds of shrimp.

During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. After the third pie, your total utility:

The term marginal utility denotes the amount by which ________ changes when consumption changes by ________ unit(s).

Refer to the accompanying figure. Suppose Zeynep's budget constraint is initially given by BC1. If her budget constraint shifts to BC2, this could be the result of:

The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts. At a price of $15 per unit, what would be the total consumer surplus in this market each day?

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

When the price of a good falls, marginal utility per dollar spent on that good , prompting consumers to purchase of that good.

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Casey can buy a maximum of pounds of fish or a maximum of pounds of shrimp.

The term marginal utility denotes the amount by which changes when consumption changes by unit(s).