Question 1

-Refer to the above table. The marginal utility of the 8th movie for Robert is

Accepted Answer

A)  30 units of utility. 
B)  20 units of utility. 
C)  420 units of utility. 
D)  5 units of utility. 
A)  30 units of utility. 
B)  20 units of utility. 
C)  420 units of utility. 
D)  5 units of utility.

Question 2

-Refer to the above table. Assume the consumer spends his entire income. If the consumer's optimum at the current price of a movie is at 4 hamburgers and 4 movies, and the price of a hamburger is $1, what is the consumer's income?

Accepted Answer

A)  $28 
B)  $20 
C)  $16 
D)  $40 
A)  $28 
B)  $20 
C)  $16 
D)  $40

Question 3

When you buy something, you do so because of the satisfaction you expect to receive from having and using that good. Another term that can be used for satisfaction is

Accepted Answer

A)  need. 
B)  purchasing power. 
C)  utility. 
D)  price elasticity. 
A)  need. 
B)  purchasing power. 
C)  utility. 
D)  price elasticity.

Question 4

The additional utility or satisfaction that one derives from consuming one more unit of any good or service is referred to as

Accepted Answer

A)  total utility. 
B)  substantive utility. 
C)  average utility. 
D)  marginal utility. 
A)  total utility. 
B)  substantive utility. 
C)  average utility. 
D)  marginal utility.

Question 5

The marginal rate of substitution is the

Accepted Answer

A)  rate at which the consumer can exchange one good for the other. 
B)  change in the quantity of one good that just offsets a one-unit change in the consumption of another good such that the total satisfaction remains constant. 
C)  change in the quantity of one good that changes the utility received by one unit. 
D)  same thing as the marginal utility of a good. 
A)  rate at which the consumer can exchange one good for the other. 
B)  change in the quantity of one good that just offsets a one-unit change in the consumption of another good such that the total satisfaction remains constant. 
C)  change in the quantity of one good that changes the utility received by one unit. 
D)  same thing as the marginal utility of a good.

Question 6

A consumer is maximizing utility when

Accepted Answer

A)  the slope of the budget constraint has reached -1. 
B)  diminishing marginal utility has set in. 
C)  the slope of the budget constraint equals the marginal rate of substitution. 
D)  the consumer has spent all of his income. 
A)  the slope of the budget constraint has reached -1. 
B)  diminishing marginal utility has set in. 
C)  the slope of the budget constraint equals the marginal rate of substitution. 
D)  the consumer has spent all of his income.

Question 7

Which of the following is FALSE about indifference curves?

Accepted Answer

A)  They are downward sloping. 
B)  They are convex to the origin. 
C)  They intersect. 
D)  They can shift. 
A)  They are downward sloping. 
B)  They are convex to the origin. 
C)  They intersect. 
D)  They can shift.

Question 8

-Using the above table, what is the maximum number of slices of pizza a rational consumer would buy?

Accepted Answer

A)  4 
B)  3 
C)  2 
D)  1 
A)  4 
B)  3 
C)  2 
D)  1

Question 9

-According to the above table, Mary's marginal utility from watching the 4th movie is

Accepted Answer

A)  140 units of utility. 
B)  40 units of utility. 
C)  60 units of utility. 
D)  30 units of utility. 
A)  140 units of utility. 
B)  40 units of utility. 
C)  60 units of utility. 
D)  30 units of utility.

Question 10

Restaurants that allow customers to eat as much as they want for a fixed price must make money or they would not remain in business. How can they earn profits when people can always eat more so that the restaurant's costs keep getting higher? What practice that regular restaurants use will not be used by all-you-can-eat places?

Accepted Answer

Restaurants are relying on the principle

Question 11

Sam loves cookies. She receives 200 utils for one cookie, 360 for two cookies, 480 for the third, 560 for four cookies, and 600 for five cookies. The marginal utility of the third cookie is

Accepted Answer

A)  120 
B)  480 
C)  80 
D)  unable to determine 
A)  120 
B)  480 
C)  80 
D)  unable to determine

Question 12

-Refer to the above table. What is the marginal utility for the 10th unit for Michelle and for Robert?

Accepted Answer

A)  Michelle: 50; Robert: 50 
B)  Michelle: 15; Robert: 20 
C)  Michelle: 10; Robert: 10 
D)  Michelle: -10; Robert: 10 
A)  Michelle: 50; Robert: 50 
B)  Michelle: 15; Robert: 20 
C)  Michelle: 10; Robert: 10 
D)  Michelle: -10; Robert: 10

Question 13

As marginal utility declines but remains positive, then

Accepted Answer

A)  total utility continues to increase but at a decreasing rate. 
B)  total utility also declines. 
C)  total utility is unaffected. 
D)  none of the above. 
A)  total utility continues to increase but at a decreasing rate. 
B)  total utility also declines. 
C)  total utility is unaffected. 
D)  none of the above.

Question 14

An indifference curve

Accepted Answer

A)  must be convex to the origin. 
B)  must be concave to the origin. 
C)  may be convex or concave to the origin. 
D)  depends on the prices of the products and the consumer's income. 
A)  must be convex to the origin. 
B)  must be concave to the origin. 
C)  may be convex or concave to the origin. 
D)  depends on the prices of the products and the consumer's income.

Question 15

-Refer to the above table. The price of a hamburger is $2, the price of a movie is $5, and the consumer's income is $29. What is the marginal utility per last dollar spent on movies equal to if the consumer is at an optimum?

Accepted Answer

A)  50 
B)  40 
C)  20 
D)  10 
A)  50 
B)  40 
C)  20 
D)  10

Question 16

-Using the above table, the marginal utility for the sixth glass of water is

Accepted Answer

A)  -5 utils. 
B)  255 utils. 
C)  5 utils. 
D)  260 utils. 
A)  -5 utils. 
B)  255 utils. 
C)  5 utils. 
D)  260 utils.

Question 17

When the price of DVDs falls relative to movie and restaurant prices, and consumers buy more of the DVDs, economists call this

Accepted Answer

A)  indifference. 
B)  satisfaction. 
C)  marginalization. 
D)  substitution. 
A)  indifference. 
B)  satisfaction. 
C)  marginalization. 
D)  substitution.

Question 18

When a consumer is at the consumer optimum,

Accepted Answer

A)    =   =   = . . . =   . 
B)    /   =   /   =   /   = . . . =   /   = 1. 
C)    =   =   = . . . =   . 
D)    /   =   /   =   /   = . . . =   /   . 
A)    =   =   = . . . =   . 
B)    /   =   /   =   /   = . . . =   /   = 1. 
C)    =   =   = . . . =   . 
D)    /   =   /   =   /   = . . . =   /   .

Question 19

Bob's Marginal Utility for consuming beer and pizza with $8.00 in income
  
-In the above table, Bob experiences diminishing marginal utility after consuming how many beers?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 20

-In the above table, what is the marginal utility of the sixth slice of pizza consumed?

Accepted Answer

A)  7 
B)  137 
C)  120 
D)  -17 
A)  7 
B)  137 
C)  120 
D)  -17

Exam 20: Consumer Choice

-Refer to the above table. The marginal utility of the 8th movie for Robert is

-Refer to the above table. Assume the consumer spends his entire income. If the consumer's optimum at the current price of a movie is at 4 hamburgers and 4 movies, and the price of a hamburger is $1, what is the consumer's income?

When you buy something, you do so because of the satisfaction you expect to receive from having and using that good. Another term that can be used for satisfaction is

The additional utility or satisfaction that one derives from consuming one more unit of any good or service is referred to as

The marginal rate of substitution is the

A consumer is maximizing utility when

Which of the following is FALSE about indifference curves?

-Using the above table, what is the maximum number of slices of pizza a rational consumer would buy?

-According to the above table, Mary's marginal utility from watching the 4th movie is

Sam loves cookies. She receives 200 utils for one cookie, 360 for two cookies, 480 for the third, 560 for four cookies, and 600 for five cookies. The marginal utility of the third cookie is

-Refer to the above table. What is the marginal utility for the 10th unit for Michelle and for Robert?

As marginal utility declines but remains positive, then

An indifference curve

-Refer to the above table. The price of a hamburger is $2, the price of a movie is $5, and the consumer's income is $29. What is the marginal utility per last dollar spent on movies equal to if the consumer is at an optimum?

-Using the above table, the marginal utility for the sixth glass of water is

When the price of DVDs falls relative to movie and restaurant prices, and consumers buy more of the DVDs, economists call this

When a consumer is at the consumer optimum,

Bob's Marginal Utility for consuming beer and pizza with $8.00 in income -In the above table, Bob experiences diminishing marginal utility after consuming how many beers?

-In the above table, what is the marginal utility of the sixth slice of pizza consumed?

The Nature of Economics

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