Question 1

Marginal utility theory shows us that water, which is very common, has a ________ marginal utility and a ________ total utility.

Accepted Answer

A)  small; large 
B)  large; small 
C)  large; large 
D)  small; small 
A)  small; large 
B)  large; small 
C)  large; large 
D)  small; small

Question 2

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 100, and the price of chocolate is $2.00 per scoop and the price of vanilla is $1.00 per scoop. Bobby has maximized his

Accepted Answer

A)  marginal utility of chocolate ice cream. 
B)  marginal utility of vanilla ice cream. 
C)  marginal utilities of chocolate ice cream and vanilla ice cream. 
D)  total utility. 
A)  marginal utility of chocolate ice cream. 
B)  marginal utility of vanilla ice cream. 
C)  marginal utilities of chocolate ice cream and vanilla ice cream. 
D)  total utility.

Question 3

Shaniq buys only soda and pizza and is buying the amounts that maximize her utility. The marginal utility from a soda is 30 and the price of a soda is $2. The marginal utility from a slice of pizza is also 30. The price of a slice of pizza must be

Accepted Answer

A)  $30. 
B)  $2. 
C)  $1. 
D)  some amount that cannot be calculated without more information. 
A)  $30. 
B)  $2. 
C)  $1. 
D)  some amount that cannot be calculated without more information.

Question 4

Economists using marginal utility theory assume that consumers' objectives are to

Accepted Answer

A)  maximize their total utility. 
B)  maximize their marginal utility. 
C)  maximize their income. 
D)  none of the above. 
A)  maximize their total utility. 
B)  maximize their marginal utility. 
C)  maximize their income. 
D)  none of the above.

Question 5

When Tom's income increases, his demand curve for Mountain Dew shifts rightward because the higher income increases his marginal utility of Mountain Dew.

Accepted Answer

A) True 
 B)False

Question 6

If you exhibit endowment effect, then you

Accepted Answer

A)  decide rationally when making decisions about selling but not when making decisions about buying. 
B)  have a strong attachment to things you already own. 
C)  buy something you cannot afford. 
D)  decide rationally when making decisions about buying but not when making decisions about selling. 
A)  decide rationally when making decisions about selling but not when making decisions about buying. 
B)  have a strong attachment to things you already own. 
C)  buy something you cannot afford. 
D)  decide rationally when making decisions about buying but not when making decisions about selling.

Question 7

A consumer maximizes total utility when all available income is spent and the

Accepted Answer

A)  marginal utility from each good is equal for all goods. 
B)  marginal utility per dollar from each good is equal for all goods. 
C)  dollars spent on the last unit of each good are equal for all goods. 
D)  total utility from all goods purchased is equal. 
A)  marginal utility from each good is equal for all goods. 
B)  marginal utility per dollar from each good is equal for all goods. 
C)  dollars spent on the last unit of each good are equal for all goods. 
D)  total utility from all goods purchased is equal.

Question 8

If marginal utility is positive but diminishing, then total utility must be ________ as consumption of the good increases.

Accepted Answer

A)  decreasing 
B)  positive and rising at an increasing rate 
C)  positive and rising at a decreasing rate 
D)  positive and rising at any rate 
A)  decreasing 
B)  positive and rising at an increasing rate 
C)  positive and rising at a decreasing rate 
D)  positive and rising at any rate

Question 9

Bags of Popcorn Bottles of soda  
-In the table above, if Brent maximizes his utility by consuming 3 bags of popcorn and 3 bottles of soda, then the ratio of the price of popcorn to the price of soda is expected to be

Accepted Answer

A)  1/2. 
B)  5/6. 
C)  6/5. 
D)  2. 
A)  1/2. 
B)  5/6. 
C)  6/5. 
D)  2.

Question 10

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will

Accepted Answer

A)  decrease the number of sodas bought and the demand curve for sodas will shift leftward. 
B)  decrease the number of sodas bought and move along the demand curve for soda. 
C)  buy more pizza and move along the demand curve for pizza. 
D)  buy less pizza and the demand curve for pizza will shift leftward. 
A)  decrease the number of sodas bought and the demand curve for sodas will shift leftward. 
B)  decrease the number of sodas bought and move along the demand curve for soda. 
C)  buy more pizza and move along the demand curve for pizza. 
D)  buy less pizza and the demand curve for pizza will shift leftward.

Question 11

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods. If your income is $14, which of the following consumption combinations will you choose?

Accepted Answer

A)  3 slices of pizza and 1 Diet Pepsi 
B)  2 slices of pizza and 3 Diet Pepsis 
C)  1 slice of pizza and 5 Diet Pepsis 
D)  0 slices of pizza and 7 Diet Pepsis 
A)  3 slices of pizza and 1 Diet Pepsi 
B)  2 slices of pizza and 3 Diet Pepsis 
C)  1 slice of pizza and 5 Diet Pepsis 
D)  0 slices of pizza and 7 Diet Pepsis

Question 12

Liz loves to eat popcorn. Still, the more she eats, the less she wants each additional bite. Her marginal utility from popcorn is

Accepted Answer

A)  diminishing. 
B)  negative. 
C)  increasing. 
D)  zero. 
A)  diminishing. 
B)  negative. 
C)  increasing. 
D)  zero.

Question 13

If Mr. McConaughey has 7 hours to spend with friends and family and breaking a sweat, he will maximize his utility if he spends

Accepted Answer

A)  2 hours with family and friends and 5 hours breaking a sweat. 
B)  5 hours with family and friends and 5 hours breaking a sweat. 
C)  4 hours with family and friends and 3 hours breaking a sweat. 
D)  3 hours with family and friends and 4 hours breaking a sweat. 
A)  2 hours with family and friends and 5 hours breaking a sweat. 
B)  5 hours with family and friends and 5 hours breaking a sweat. 
C)  4 hours with family and friends and 3 hours breaking a sweat. 
D)  3 hours with family and friends and 4 hours breaking a sweat.

Question 14

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

Accepted Answer

A)  People derive utility from their consumption. 
B)  More consumption yields more total utility. 
C)  Marginal utility diminishes with more consumption. 
D)  Utility can be measured and the units of utility are precisely defined. 
A)  People derive utility from their consumption. 
B)  More consumption yields more total utility. 
C)  Marginal utility diminishes with more consumption. 
D)  Utility can be measured and the units of utility are precisely defined.

Question 15

Neuroeconomics is

Accepted Answer

A)  the study of the activity of a human brain when the person makes economic decision. 
B)  the study of how people behave when they face scarcity. 
C)  the study of situations in which people act economically irrationally. 
D)  the study of how people make decisions at the margin. 
A)  the study of the activity of a human brain when the person makes economic decision. 
B)  the study of how people behave when they face scarcity. 
C)  the study of situations in which people act economically irrationally. 
D)  the study of how people make decisions at the margin.

Question 16

Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________.

Accepted Answer

A)  supply of; increases; demand for; decreases 
B)  supply of; decreases; supply of; increases 
C)  demand for; increases; quantity demanded of; decreases 
D)  demand for; decreases; demand for; increases 
A)  supply of; increases; demand for; decreases 
B)  supply of; decreases; supply of; increases 
C)  demand for; increases; quantity demanded of; decreases 
D)  demand for; decreases; demand for; increases

Question 17

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 combination of milkshakes and sodas maximizes Tom's utility?

Accepted Answer

A)  5 milkshakes and 0 sodas 
B)  4 milkshakes and 2 sodas 
C)  3 milkshakes and 4 sodas 
D)  2 milkshakes and 6 sodas 
A)  5 milkshakes and 0 sodas 
B)  4 milkshakes and 2 sodas 
C)  3 milkshakes and 4 sodas 
D)  2 milkshakes and 6 sodas

Question 18

-Steve has two goods he can spend his income on, skiing and skating, and his marginal utilities from each are in the table above. The price of each unit of skiing is $10 and the price of each unit of skating is $5. Steve has $40 to spend. If Steve consumes the quantities of skiing and skating to maximize his utility, what is his total utility?

Accepted Answer

A)  40 
B)  60 
C)  250 
D)  300 
A)  40 
B)  60 
C)  250 
D)  300

Question 19

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones. Complete the table.

Accepted Answer

@#IMG-DLM& The compl

Question 20

Milkshakes Sodas  
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What is Tom's total utility at his consumer equilibrium?

Accepted Answer

A)  1900 units 
B)  2155 units 
C)  2266 units 
D)  2278 units 
A)  1900 units 
B)  2155 units 
C)  2266 units 
D)  2278 units

Marginal utility theory shows us that water, which is very common, has a marginal utility and a total utility.

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 100, and the price of chocolate is $2.00 per scoop and the price of vanilla is $1.00 per scoop. Bobby has maximized his

Shaniq buys only soda and pizza and is buying the amounts that maximize her utility. The marginal utility from a soda is 30 and the price of a soda is $2. The marginal utility from a slice of pizza is also 30. The price of a slice of pizza must be

Economists using marginal utility theory assume that consumers' objectives are to

When Tom's income increases, his demand curve for Mountain Dew shifts rightward because the higher income increases his marginal utility of Mountain Dew.

If you exhibit endowment effect, then you

A consumer maximizes total utility when all available income is spent and the

If marginal utility is positive but diminishing, then total utility must be ________ as consumption of the good increases.

Bags of Popcorn Bottles of soda -In the table above, if Brent maximizes his utility by consuming 3 bags of popcorn and 3 bottles of soda, then the ratio of the price of popcorn to the price of soda is expected to be

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods. If your income is $14, which of the following consumption combinations will you choose?

Liz loves to eat popcorn. Still, the more she eats, the less she wants each additional bite. Her marginal utility from popcorn is

If Mr. McConaughey has 7 hours to spend with friends and family and breaking a sweat, he will maximize his utility if he spends

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

Neuroeconomics is

Marginal utility theory predicts that as the price of coffee rises, the a substitute for coffee and the coffee .

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 combination of milkshakes and sodas maximizes Tom's utility?

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones. Complete the table.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What is Tom's total utility at his consumer equilibrium?

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

Marginal utility theory shows us that water, which is very common, has a ________ marginal utility and a ________ total utility.

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 100, and the price of chocolate is $2.00 per scoop and the price of vanilla is $1.00 per scoop. Bobby has maximized his

Shaniq buys only soda and pizza and is buying the amounts that maximize her utility. The marginal utility from a soda is 30 and the price of a soda is $2. The marginal utility from a slice of pizza is also 30. The price of a slice of pizza must be

Economists using marginal utility theory assume that consumers' objectives are to

When Tom's income increases, his demand curve for Mountain Dew shifts rightward because the higher income increases his marginal utility of Mountain Dew.

If you exhibit endowment effect, then you

A consumer maximizes total utility when all available income is spent and the

If marginal utility is positive but diminishing, then total utility must be ________ as consumption of the good increases.

Bags of Popcorn Bottles of soda -In the table above, if Brent maximizes his utility by consuming 3 bags of popcorn and 3 bottles of soda, then the ratio of the price of popcorn to the price of soda is expected to be

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods. If your income is $14, which of the following consumption combinations will you choose?

Liz loves to eat popcorn. Still, the more she eats, the less she wants each additional bite. Her marginal utility from popcorn is

If Mr. McConaughey has 7 hours to spend with friends and family and breaking a sweat, he will maximize his utility if he spends

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

Neuroeconomics is

Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________.

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 combination of milkshakes and sodas maximizes Tom's utility?

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones. Complete the table.

Milkshakes Sodas -The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $20.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What is Tom's total utility at his consumer equilibrium?

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

Marginal utility theory shows us that water, which is very common, has a marginal utility and a total utility.

Marginal utility theory predicts that as the price of coffee rises, the a substitute for coffee and the coffee .