Exam 5: Consumer Choice

In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below: -Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,what would be their maximum total revenue?

Differentiate between marginal utility and total utility.

Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one. -Refer to the above information to answer this question.If the price of cranberry juice is 80 cents a glass,how much consumer surplus will she receive as a result of her purchases?

The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones). -What is the term for the selling of an identical product at a different price to different customers for reasons other than cost?

The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep. -Refer to the above graph to answer this question.If the price of milk is $2,the price of a cookie is $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?

Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below. -Why does the demand curve slope downward?

-Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.The tennis coach is practicing:

"Total utility declines when marginal utility declines." Evaluate this statement.

Suppose that Reza buys two products and that the marginal utility of an additional carton of soy milk is 20 and its price is $1.25,whereas the marginal utility for an additional orange costing 50 cents is 7. -Refer to the above information to answer this question.What can be deduced?

Consumer surplus is the additional amount that consumers have to pay if they really need a particular product.

Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one. -What is the correct formula for MCS (marginal consumer surplus)?

What does the diamond-water paradox refer to?

Suppose that Reza buys two products and that the marginal utility of an additional carton of soy milk is 20 and its price is $1.25,whereas the marginal utility for an additional orange costing 50 cents is 7. -Refer to the above information to answer this question.What can be deduced?

A new bakery has just opened,and in an attempt to attract awareness,it is offering free unlimited samples of its chocolate chip cookies.Assuming you can only consume the cookies in-store (you cannot take them home),how many pieces of cookie would you have?

Which of the following is correct in reference to the law of diminishing marginal utility?

The following table shows Mia's $ marginal utility for litres of soya milk: -If the price of soya milk is $2 per litre,what is the maximum number of litres that Mia will buy?

-Refer to the above information to answer this question.What is the total utility of 7 units?

The law of diminishing marginal utility suggests that as successive units of a product are consumed,total utility declines.

June's evaluation of packets of nacho chips in terms of $MU is as follows: 1^st packet: $4;2^nd packet: $3.50;3^rd packet: $2.90;4^th packet: $2.30;5^th packet: $1.60.If the price of nacho chips is $1.50,and June buys 5 packets,calculate her marginal consumer surplus for each packet and the total consumer surplus form all 5.

The following table shows Erica's utility for muffins and grapefruit. -Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be her optimal purchase?