Exam 8: Utility and Demand

Tom's marginal utility of Mountain Dew exceeds his marginal utility of crackers at his consumer equilibrium. Therefore, his consumer surplus from Mountain Dew must exceed his consumer surplus from crackers.

"Because the price of a diamond is much greater than the price of a gallon of water, the consumer surplus from diamonds is greater than the consumer surplus from water." Is the previous analysis CORRECT? Explain your answer.

Sub sandwiches Mountain Dew -Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a Mountain Dew increases

-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. What is the marginal utility per dollar from magazines when the sixth magazine is purchased?

As Shana's consumption of tacos decreases, her

As you consume more and more of any good, you experience ________ utility.

-The table above gives Cathy's total utility from Mt. Dew. Cathy's marginal utility from the 4th Mt. Dew is ________ units.

Suppose that Alyssa spends all her income on video games and DVDs and her marginal utility per dollar from video games equals that from DVDs. Is Alyssa maximizing her utility? Now, suppose that the price of a DVD falls. Should Alyssa change the combination of goods she consumes? If yes, how? Explain.

Which of the following is NOT an assumption of marginal utility theory?

Chips Sodas -The table above shows Mary's utility from chips and soda. The table shows that

Suppose Abe is allocating his entire income and he receives 100 units of utility per dollar from the tenth slice of pizza and 200 units of utility per dollar from his second soda. Is Abe maximizing his utility? Should Abe change his consumption of pizza and soda?

When economists speak of normal goods they mean goods for which

Joshua consumes only apples and bread and is in consumer equilibrium. Joshua reads that eating bread is healthy, so his total utility from each loaf of bread increases. At his new consumer equilibrium Joshua would consume

-Kelly's marginal utilities for magazines and packages of gummy bears are listed in the table above. What is the extra utility received by Kelly when she decides to consume 3 packages of gummy bears instead of 2 packages?

The fact that rubies are more expensive than milk reflects the fact that for most consumers

Which of the following is NOT an assumption of marginal utility theory?

-Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for pizza and marginal utility for DVDs. If the price of a pizza is $10 and the price of a DVD is $10 and Lisa has $60 to spend on the two goods, what combination of pizza and DVDs will maximize her utility?

-Betsy's utility depending from her consumption of coffee is shown in the table above. If the price of a cup of coffee is $2, Betsy's marginal utility per dollar from the 2nd cup of coffee per day is

Emma consumes only hot dogs and hamburgers. She is at her consumer equilibrium. Hot dogs and hamburgers have the same marginal utility. Thus

Which of the following is consistent with the assumptions of marginal utility theory?