Question 1

Table 5.1 shows Raj's utility from bananas.Complete the table.
Table 5.1

Accepted Answer

The answer of Table 5.1 shows Raj's utility from bananas.Complete...

Question 2

What is the correct expression for marginal utility?

Accepted Answer

A) It is equal to total utility divided by quantity consumed. 
B) It is the change in total utility resulting from a change in the quantity consumed. 
C) It is equal to total utility divided by the quantity demanded. 
D) It is equal to the additional utility divided by the quantity consumed. 
A) It is equal to total utility divided by quantity consumed. 
B) It is the change in total utility resulting from a change in the quantity consumed. 
C) It is equal to total utility divided by the quantity demanded. 
D) It is equal to the additional utility divided by the quantity consumed.

Question 3

Explain what is meant by the term consumer surplus.

Accepted Answer

Consumer surplus is the difference betwe

Question 4

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 both muffins and grapefruit are $1,what will be her optimal purchase?

Accepted Answer

A) 1 muffin and 4 grapefruit. 
B) 2 muffins and 3 grapefruit. 
C) 3 muffins and 2 grapefruit. 
D) 4 muffins and 1 grapefruit. 
E) 5 muffins. 
A) 1 muffin and 4 grapefruit. 
B) 2 muffins and 3 grapefruit. 
C) 3 muffins and 2 grapefruit. 
D) 4 muffins and 1 grapefruit. 
E) 5 muffins.

Question 5

The following table shows Pierre's utility for bagels and cider.
  
-Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?

Accepted Answer

A) 1 bagel and 5 ciders. 
B) 2 bagels and 4 ciders. 
C) 3 bagels and 3 ciders. 
D) 4 bagels and 2 ciders. 
E) 5 bagels and 1 ciders. 
A) 1 bagel and 5 ciders. 
B) 2 bagels and 4 ciders. 
C) 3 bagels and 3 ciders. 
D) 4 bagels and 2 ciders. 
E) 5 bagels and 1 ciders.

Question 6

What conditions must exist in order for price discrimination to be practiced?

Accepted Answer

Four conditions must prevail for price d

Question 7

-What is the law of diminishing marginal utility?

Accepted Answer

A) The amount of additional utility decreases as successive units of a product is consumed. 
B) Marginal utility increases quickly at first,but more slowly later. 
C) Total utility declines at first,but after some point starts to increase. 
D) While total utility rises with the consumption of additional units,marginal utility is always constant. 
A) The amount of additional utility decreases as successive units of a product is consumed. 
B) Marginal utility increases quickly at first,but more slowly later. 
C) Total utility declines at first,but after some point starts to increase. 
D) While total utility rises with the consumption of additional units,marginal utility is always constant.

Question 8

If total utility is falling,what is also true?

Accepted Answer

A) Marginal utility must be negative. 
B) Marginal utility must also be falling. 
C) Marginal utility must be greater than total utility. 
D) Marginal utility must be rising. 
A) Marginal utility must be negative. 
B) Marginal utility must also be falling. 
C) Marginal utility must be greater than total utility. 
D) Marginal utility must be rising.

Question 9

-Refer to Table 5.17 to answer this question.Assume that the price of a latté is $5 and pastries are priced at $4 each.If Kyle has $36 to spend how many units of each will he buy in order to maximize his TU?

Accepted Answer

A) 2 lattés and 6 pastries. 
B) 3 lattés and 5 pastries. 
C) 4 lattés and 4 pastries. 
D) 5 lattés and 3 pastries. 
A) 2 lattés and 6 pastries. 
B) 3 lattés and 5 pastries. 
C) 4 lattés and 4 pastries. 
D) 5 lattés and 3 pastries.

Question 10

Table 5.2 shows Rachel's total utility from consuming ice cream sandwiches.Is it possible that the marginal utility of the 4th unit is 14?
Table 5.2

Accepted Answer

No,if the marginal utility for the 4^th uni

Question 11

The following table shows Mia's $ marginal utility for litres of soya milk:
  
-Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?

Accepted Answer

A) 0. 
B) 4 litres. 
C) 5 litres. 
D) 6 litres. 
E) Cannot be determined. 
A) 0. 
B) 4 litres. 
C) 5 litres. 
D) 6 litres. 
E) Cannot be determined.

Question 12

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.
  
-If a consumer buys more than one unit of a product,which of the following statements is true?

Accepted Answer

A) The value of the last unit purchased must be greater than the value of the previous units,otherwise it would not be bought. 
B) The consumer rates the value of each unit equally,otherwise she would not buy more of the item. 
C) The value of the last unit purchased is always less than the value of the previous units. 
D) It is the value of the first unit purchased which determines the total number of units which will be purchased. 
A) The value of the last unit purchased must be greater than the value of the previous units,otherwise it would not be bought. 
B) The consumer rates the value of each unit equally,otherwise she would not buy more of the item. 
C) The value of the last unit purchased is always less than the value of the previous units. 
D) It is the value of the first unit purchased which determines the total number of units which will be purchased.

Question 13

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.
-In which book is the diamond-water paradox first mentioned?

Accepted Answer

A) Marx's Das Kapital. 
B) Keynes's General Theory. 
C) Ricardo's Principles of Political Economy and Taxation. 
D) Adam Smith's Wealth of Nations. 
E) Marshall's Principles of Economics. 
A) Marx's Das Kapital. 
B) Keynes's General Theory. 
C) Ricardo's Principles of Political Economy and Taxation. 
D) Adam Smith's Wealth of Nations. 
E) Marshall's Principles of Economics.

Question 14

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,in order to maximize revenue,which of the following statements is correct?

Accepted Answer

A) The consumer group with the highest price elasticity of demand should be charged the highest price. 
B) The consumer group with the highest price elasticity of demand should be charged the lowest price. 
C) The consumer group with the lowest price elasticity of demand should be charged the lowest price. 
D) The consumer group which should be charged the highest price depends upon which has the smallest marginal utility. 
A) The consumer group with the highest price elasticity of demand should be charged the highest price. 
B) The consumer group with the highest price elasticity of demand should be charged the lowest price. 
C) The consumer group with the lowest price elasticity of demand should be charged the lowest price. 
D) The consumer group which should be charged the highest price depends upon which has the smallest marginal utility.

Question 15

Table 5.4 shows Matt's total utility for Goods A,B,C,and
C.
b)64 utils.
D.
Table 5.4
   
Suppose the prices for Good A,B,and C are $1,$2,and $3 respectively.If Matt's budget is $20,what is the Matt's consumption bundle?
What is his total utility?
a)Matt's consumption bundle will be 4 units of Good A,5 units of Good B,and 2 unit of Good

Accepted Answer

a)Matt's consumption bundle wi

Question 16

The consumer surplus derived from products that have an inelastic demand is greater than that from products with an elastic demand.

Accepted Answer

A) True 
 B)False

Question 17

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 price discrimination?

Accepted Answer

A) The selling of different products to the same customer at different prices. 
B) The selling of an identical product to different customers at the same price. 
C) The selling of an identical product to different customers at different prices. 
D) The selling of different products to different customers at different prices. 
A) The selling of different products to the same customer at different prices. 
B) The selling of an identical product to different customers at the same price. 
C) The selling of an identical product to different customers at different prices. 
D) The selling of different products to different customers at different prices.

Question 18

Demonstrate graphically and explain verbally the concept of consumer surplus.

Accepted Answer

Consumer surplus is the value a consumer

Question 19

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,in order to maximize total revenue what price should be charged to type A,type B and type O respectively?

Accepted Answer

A) $3,$3 and $4. 
B) $3,$4 and $4. 
C) $3,$4 and $5. 
D) $3.50,$4 and $4.50. 
E) $4,$4.50 and $5. 
A) $3,$3 and $4. 
B) $3,$4 and $4. 
C) $3,$4 and $5. 
D) $3.50,$4 and $4.50. 
E) $4,$4.50 and $5.

Question 20

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 term for the difference between the consumer's evaluation of a product and the price which is paid for it?

Accepted Answer

A) Price discrimination. 
B) Price elasticity of demand. 
C) Consumer indifference. 
D) Consumer surplus. 
A) Price discrimination. 
B) Price elasticity of demand. 
C) Consumer indifference. 
D) Consumer surplus.

Table 5.1 shows Raj's utility from bananas.Complete the table. Table 5.1

What is the correct expression for marginal utility?

Explain what is meant by the term consumer surplus.

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 both muffins and grapefruit are $1,what will be her optimal purchase?

The following table shows Pierre's utility for bagels and cider. -Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?

What conditions must exist in order for price discrimination to be practiced?

-What is the law of diminishing marginal utility?

If total utility is falling,what is also true?

-Refer to Table 5.17 to answer this question.Assume that the price of a latté is $5 and pastries are priced at $4 each.If Kyle has $36 to spend how many units of each will he buy in order to maximize his TU?

Table 5.2 shows Rachel's total utility from consuming ice cream sandwiches.Is it possible that the marginal utility of the 4^th unit is 14? Table 5.2

The following table shows Mia's $ marginal utility for litres of soya milk: -Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?

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. -In which book is the diamond-water paradox first mentioned?

The consumer surplus derived from products that have an inelastic demand is greater than that from products with an elastic demand.

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 price discrimination?

Demonstrate graphically and explain verbally the concept of consumer surplus.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 5: Consumer Choice

Table 5.1 shows Raj's utility from bananas.Complete the table. Table 5.1

What is the correct expression for marginal utility?

Explain what is meant by the term consumer surplus.

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 both muffins and grapefruit are $1,what will be her optimal purchase?

The following table shows Pierre's utility for bagels and cider. -Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?

What conditions must exist in order for price discrimination to be practiced?

-What is the law of diminishing marginal utility?

If total utility is falling,what is also true?

-Refer to Table 5.17 to answer this question.Assume that the price of a latté is $5 and pastries are priced at $4 each.If Kyle has $36 to spend how many units of each will he buy in order to maximize his TU?

Table 5.2 shows Rachel's total utility from consuming ice cream sandwiches.Is it possible that the marginal utility of the 4th unit is 14? Table 5.2

The following table shows Mia's $ marginal utility for litres of soya milk: -Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?

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. -In which book is the diamond-water paradox first mentioned?

The consumer surplus derived from products that have an inelastic demand is greater than that from products with an elastic demand.

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 price discrimination?

Demonstrate graphically and explain verbally the concept of consumer surplus.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Table 5.2 shows Rachel's total utility from consuming ice cream sandwiches.Is it possible that the marginal utility of the 4^th unit is 14? Table 5.2