Question 1

The tendency of people to value something more highly when they own it is called the

Accepted Answer

A)  wealth effect. 
B)  endowment effect. 
C)  path dependent effect. 
D)  endorsement effect. 
A)  wealth effect. 
B)  endowment effect. 
C)  path dependent effect. 
D)  endorsement effect.

Question 2

Magazines Chocolate bars  
-Sonya's budget for magazines and chocolate bars is $50. Her marginal utility from these goods is shown in the table above. The price of a magazine is $5 and the price of a chocolate bar is $2.50. Sonya currently buys 2 magazines and 12 chocolate bars. To maximize her utility, she should

Accepted Answer

A)  buy more chocolate bars and fewer magazines. 
B)  buy more magazines and fewer chocolate bars. 
C)  buy more of both goods. 
D)  stay with the current combination of goods. 
A)  buy more chocolate bars and fewer magazines. 
B)  buy more magazines and fewer chocolate bars. 
C)  buy more of both goods. 
D)  stay with the current combination of goods.

Question 3

Marginal utility is the

Accepted Answer

A)  usefulness of a product. 
B)  utility that a person receives from the consumption of goods and services. 
C)  change in utility that results from a one-unit change in the quantity of a good consumed. 
D)  change in utility that results from a one-unit change in the price of a good consumed. 
A)  usefulness of a product. 
B)  utility that a person receives from the consumption of goods and services. 
C)  change in utility that results from a one-unit change in the quantity of a good consumed. 
D)  change in utility that results from a one-unit change in the price of a good consumed.

Question 4

Which of the following statements is TRUE?

Accepted Answer

A)  As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility. 
B)  As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility. 
C)  No two people have identical utility functions, just as no two people have identical fingerprints. 
D)  Both A and C above. 
A)  As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility. 
B)  As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility. 
C)  No two people have identical utility functions, just as no two people have identical fingerprints. 
D)  Both A and C above.

Question 5

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the fifth pound of cookies is

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  15. 
A)  1. 
B)  2. 
C)  3. 
D)  15.

Question 6

-In the figure above, the curve that shows the diminishing marginal utility is

Accepted Answer

A)  total utility curve A because it gets steeper as consumption of tomatoes increases. 
B)  total utility curve A because it is higher than total utility curves B or C. 
C)  total utility curve C because it gets flatter as consumption of tomatoes increases. 
D)  total utility curve C because it is lower than total utility curves B and C. 
A)  total utility curve A because it gets steeper as consumption of tomatoes increases. 
B)  total utility curve A because it is higher than total utility curves B or C. 
C)  total utility curve C because it gets flatter as consumption of tomatoes increases. 
D)  total utility curve C because it is lower than total utility curves B and C.

Question 7

-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?

Accepted Answer

A)  3 pens and 6 pencils 
B)  4 pens and 5 pencils 
C)  5 pens and 4 pencils 
D)  6 pens and 3 pencils 
A)  3 pens and 6 pencils 
B)  4 pens and 5 pencils 
C)  5 pens and 4 pencils 
D)  6 pens and 3 pencils

Question 8

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

Accepted Answer

A)  one 
B)  two 
C)  three 
D)  four 
A)  one 
B)  two 
C)  three 
D)  four

Question 9

When Alex eats 1 slice of pizza, his total utility is 80; when Alex eats 2 slices of pizza, his total utility is 120. Alex's marginal utility from the second pizza is

Accepted Answer

A)  200. 
B)  80. 
C)  60. 
D)  40. 
A)  200. 
B)  80. 
C)  60. 
D)  40.

Question 10

-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 $40 to spend on the two goods, what combination of pizza and DVDs will maximize her utility?

Accepted Answer

A)  1 DVD and 3 pizzas 
B)  2 DVDs and 2 pizzas 
C)  2 DVDs and 4 pizzas 
D)  3 DVDs and 5 pizzas 
A)  1 DVD and 3 pizzas 
B)  2 DVDs and 2 pizzas 
C)  2 DVDs and 4 pizzas 
D)  3 DVDs and 5 pizzas

Question 11

Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

Accepted Answer

A)  marginal utility from cola to the marginal utility from comics 
B)  marginal utility from comics to the marginal utility from cola 
C)  number of comics Tom buys to the number of cola Tom buys 
D)  total utility from comics to the total utility from cola 
A)  marginal utility from cola to the marginal utility from comics 
B)  marginal utility from comics to the marginal utility from cola 
C)  number of comics Tom buys to the number of cola Tom buys 
D)  total utility from comics to the total utility from cola

Question 12

When the price of popcorn falls, before there is any change in consumption, the

Accepted Answer

A)  marginal utility of popcorn definitely increases. 
B)  marginal utility per dollar from popcorn definitely increases. 
C)  total expenditure on popcorn definitely rises. 
D)  entire total utility of popcorn curve definitely shifts rightward. 
A)  marginal utility of popcorn definitely increases. 
B)  marginal utility per dollar from popcorn definitely increases. 
C)  total expenditure on popcorn definitely rises. 
D)  entire total utility of popcorn curve definitely shifts rightward.

Question 13

-In the table above, which of the following is TRUE?

Accepted Answer

A)  Jim and Sally have increasing marginal utility. 
B)  Jim has increasing marginal utility and Sally has diminishing marginal utility. 
C)  Jim has diminishing marginal utility and Sally has increasing marginal utility. 
D)  Jim and Sally have diminishing marginal utility. 
A)  Jim and Sally have increasing marginal utility. 
B)  Jim has increasing marginal utility and Sally has diminishing marginal utility. 
C)  Jim has diminishing marginal utility and Sally has increasing marginal utility. 
D)  Jim and Sally have diminishing marginal utility.

Question 14

-As Betsy's consumption of coffee increases, her marginal utility from coffee

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains unchanged. 
D)  increases first and then decreases. 
A)  increases. 
B)  decreases. 
C)  remains unchanged. 
D)  increases first and then decreases.

Question 15

Jeannie's marginal utility from her 4th book in a month is 50. Her marginal utility from her 5th book

Accepted Answer

A)  is greater than 50. 
B)  equals 50. 
C)  is less than 50. 
D)  might be more than, less than, or equal to 50 but more information is needed. 
A)  is greater than 50. 
B)  equals 50. 
C)  is less than 50. 
D)  might be more than, less than, or equal to 50 but more information is needed.

Question 16

Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income. His marginal utility of chocolate is 200 and his marginal utility of vanilla is 200, and the price of chocolate is $1.00 per scoop and the price of vanilla is $2.00 per scoop. To maximize his utility, Bobby should

Accepted Answer

A)  buy more chocolate ice cream and less vanilla ice cream. 
B)  buy more vanilla ice cream and less chocolate ice cream. 
C)  not change his purchases between chocolate ice cream and vanilla ice cream. 
D)  buy no vanilla ice cream. 
A)  buy more chocolate ice cream and less vanilla ice cream. 
B)  buy more vanilla ice cream and less chocolate ice cream. 
C)  not change his purchases between chocolate ice cream and vanilla ice cream. 
D)  buy no vanilla ice cream.

Question 17

Using marginal utility theory, when the price of a gallon of milk falls, a consumer will buy

Accepted Answer

A)  the same amount of milk as before and buy more of all other goods. 
B)  more milk. 
C)  more milk only if its marginal utility is increasing. 
D)  more milk only if its marginal utility is constant. 
A)  the same amount of milk as before and buy more of all other goods. 
B)  more milk. 
C)  more milk only if its marginal utility is increasing. 
D)  more milk only if its marginal utility is constant.

Question 18

Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will ________ and her marginal utility from books will ________.

Accepted Answer

A)  decrease; decrease 
B)  increase; decrease 
C)  decrease; increase 
D)  increase; increase 
A)  decrease; decrease 
B)  increase; decrease 
C)  decrease; increase 
D)  increase; increase

Question 19

Tom's marginal utility from a Sobe exceeds his marginal utility of crackers. Therefore, his total utility of Sobe must exceed his total utility of crackers.

Accepted Answer

A) True 
 B)False

Question 20

Pizza Pepsi  
-The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza

Accepted Answer

A)  she is maximizing her total utility. 
B)  she is not equating marginal utility per dollar for pizza and Pepsi. 
C)  she is not at a consumer equilibrium. 
D)  Both answers B and C are correct. 
A)  she is maximizing her total utility. 
B)  she is not equating marginal utility per dollar for pizza and Pepsi. 
C)  she is not at a consumer equilibrium. 
D)  Both answers B and C are correct.

The tendency of people to value something more highly when they own it is called the

Marginal utility is the

Which of the following statements is TRUE?

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the fifth pound of cookies is

-In the figure above, the curve that shows the diminishing marginal utility is

-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

When Alex eats 1 slice of pizza, his total utility is 80; when Alex eats 2 slices of pizza, his total utility is 120. Alex's marginal utility from the second pizza is

Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

When the price of popcorn falls, before there is any change in consumption, the

-In the table above, which of the following is TRUE?

-As Betsy's consumption of coffee increases, her marginal utility from coffee

Jeannie's marginal utility from her 4th book in a month is 50. Her marginal utility from her 5th book

Using marginal utility theory, when the price of a gallon of milk falls, a consumer will buy

Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will and her marginal utility from books will .

Tom's marginal utility from a Sobe exceeds his marginal utility of crackers. Therefore, his total utility of Sobe must exceed his total utility of crackers.

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 8: Utility and Demand

The tendency of people to value something more highly when they own it is called the

Marginal utility is the

Which of the following statements is TRUE?

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the fifth pound of cookies is

-In the figure above, the curve that shows the diminishing marginal utility is

-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What quantity of sodas does Tom purchase at his consumer equilibrium?

When Alex eats 1 slice of pizza, his total utility is 80; when Alex eats 2 slices of pizza, his total utility is 120. Alex's marginal utility from the second pizza is

Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4.

When the price of popcorn falls, before there is any change in consumption, the

-In the table above, which of the following is TRUE?

-As Betsy's consumption of coffee increases, her marginal utility from coffee

Jeannie's marginal utility from her 4th book in a month is 50. Her marginal utility from her 5th book

Using marginal utility theory, when the price of a gallon of milk falls, a consumer will buy

Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will ________ and her marginal utility from books will ________.

Tom's marginal utility from a Sobe exceeds his marginal utility of crackers. Therefore, his total utility of Sobe must exceed his total utility of crackers.

Pizza Pepsi -The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will and her marginal utility from books will .