Question 1

If total utility from consuming five cups of cocoa is 10,22,32,41,and 49 utils,respectively,the marginal utility of the fourth cup of coffee is 9.

Accepted Answer

A) True 
 B)False

Question 2

The amount of added utility that an individual derives from consuming one more unit of a good or service is called:

Accepted Answer

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

Question 3

An increase in total utility would be depicted using indifference curve analysis as:

Accepted Answer

A)  a movement down along an indifference curve to the southeast. 
B)  a movement up along an indifference curve to the northwest. 
C)  a movement from one indifference curve to another located to the northeast. 
D)  a movement from one indifference curve to another located to the southwest. 
A)  a movement down along an indifference curve to the southeast. 
B)  a movement up along an indifference curve to the northwest. 
C)  a movement from one indifference curve to another located to the northeast. 
D)  a movement from one indifference curve to another located to the southwest.

Question 4

Budget lines:

Accepted Answer

A)  are typically positively sloped. 
B)  are typically negatively sloped. 
C)  often have the same slope as indifference curves. 
D)  are generally horizontal. 
A)  are typically positively sloped. 
B)  are typically negatively sloped. 
C)  often have the same slope as indifference curves. 
D)  are generally horizontal.

Question 5

Suppose both goods L and M have a price of $6.To maximize your utility from spending a given amount of income on the two goods you should:

Accepted Answer

A)  consume more each as long as they provide more than 6 units of marginal utility each. 
B)  consume them so that consumption of each good provides the same total utility. 
C)  consume them so that consumption of the last unit each good provides the same marginal utility. 
D)  all of the above. 
A)  consume more each as long as they provide more than 6 units of marginal utility each. 
B)  consume them so that consumption of each good provides the same total utility. 
C)  consume them so that consumption of the last unit each good provides the same marginal utility. 
D)  all of the above.

Question 6

Exhibit 10-2   Refer to Exhibit 10-2.Which indifference curve best reflects a person's indifference between two $10 bills and a $20 bill?

Accepted Answer

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

Question 7

If a consumer is maximizing utility,she will purchase quantities of output to the point where the total utility per dollar spent on consumption is equal across all goods.

Accepted Answer

A) True 
 B)False

Question 8

Consumer equilibrium occurs at:

Accepted Answer

A)  the point where the indifference curve crosses the budget line from below. 
B)  any point of intersection between an indifference curve and the budget line. 
C)  the midpoint of every indifference curve. 
D)  the point of tangency between an indifference curve and the budget line. 
A)  the point where the indifference curve crosses the budget line from below. 
B)  any point of intersection between an indifference curve and the budget line. 
C)  the midpoint of every indifference curve. 
D)  the point of tangency between an indifference curve and the budget line.

Question 9

Utility theory is an efficient tool in making interpersonal utility comparisons.

Accepted Answer

A) True 
 B)False

If total utility from consuming five cups of cocoa is 10,22,32,41,and 49 utils,respectively,the marginal utility of the fourth cup of coffee is 9.

The amount of added utility that an individual derives from consuming one more unit of a good or service is called:

An increase in total utility would be depicted using indifference curve analysis as:

Budget lines:

Suppose both goods L and M have a price of $6.To maximize your utility from spending a given amount of income on the two goods you should:

Exhibit 10-2 Refer to Exhibit 10-2.Which indifference curve best reflects a person's indifference between two $10 bills and a $20 bill?

If a consumer is maximizing utility,she will purchase quantities of output to the point where the total utility per dollar spent on consumption is equal across all goods.

Consumer equilibrium occurs at:

Utility theory is an efficient tool in making interpersonal utility comparisons.

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

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Exam 10: Consumer Choice Theory

If total utility from consuming five cups of cocoa is 10,22,32,41,and 49 utils,respectively,the marginal utility of the fourth cup of coffee is 9.

The amount of added utility that an individual derives from consuming one more unit of a good or service is called:

An increase in total utility would be depicted using indifference curve analysis as:

Budget lines:

Suppose both goods L and M have a price of $6.To maximize your utility from spending a given amount of income on the two goods you should:

Exhibit 10-2 Refer to Exhibit 10-2.Which indifference curve best reflects a person's indifference between two $10 bills and a $20 bill?

If a consumer is maximizing utility,she will purchase quantities of output to the point where the total utility per dollar spent on consumption is equal across all goods.

Consumer equilibrium occurs at:

Utility theory is an efficient tool in making interpersonal utility comparisons.

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters