Question 1

-Refer to Table 5.14 to answer this question.What are the missing numbers in the total utility column?

Accepted Answer

A) 135,305,and 435. 
B) 90,340,and 450. 
C) 190,340,and 450. 
D) Cannot be determined with the information given. 
A) 135,305,and 435. 
B) 90,340,and 450. 
C) 190,340,and 450. 
D) Cannot be determined with the information given.

Question 2

What does the law of diminishing marginal utility state?

Accepted Answer

A) That the amount of additional utility increases as successive units of a product are consumed. 
B) That the amount of total utility decreases at an increasing rate. 
C) That the amount of total utility decreases at a decreasing rate. 
D) That the amount of additional utility decreases as successive units of a product are consumed. 
A) That the amount of additional utility increases as successive units of a product are consumed. 
B) That the amount of total utility decreases at an increasing rate. 
C) That the amount of total utility decreases at a decreasing rate. 
D) That the amount of additional utility decreases as successive units of a product are consumed.

Question 3

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,the price of bagels is $1 and cider is $2,what will be his optimal purchase?

Accepted Answer

A) 2 bagel and 5 ciders. 
B) 4 bagel and 4 ciders. 
C) 6 bagels and 3 ciders. 
D) 8 bagels and 2 ciders. 
E) 10 bagels and 1 ciders. 
A) 2 bagel and 5 ciders. 
B) 4 bagel and 4 ciders. 
C) 6 bagels and 3 ciders. 
D) 8 bagels and 2 ciders. 
E) 10 bagels and 1 ciders.

Question 4

The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
  
-Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $700 to spend,how many units of each would she purchase?

Accepted Answer

A) 7 water 
B) 4 water and 3 diamonds. 
C) 3 water and 4 diamonds. 
D) 2 water and 5 diamonds. 
E) 1 water and 6 diamonds. 
A) 7 water 
B) 4 water and 3 diamonds. 
C) 3 water and 4 diamonds. 
D) 2 water and 5 diamonds. 
E) 1 water and 6 diamonds.

Question 5

-Refer to Figure 5.5 to answer this question.If partial units cannot be purchased,what is the value of total consumer surplus at a price of $5?

Accepted Answer

A) $10. 
B) $12. 
C) $20. 
D) $35. 
A) $10. 
B) $12. 
C) $20. 
D) $35.

Question 6

The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
  
-Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,what is the value of her total consumer surplus if she purchases the optimal quantity?

Accepted Answer

A) 0. 
B) $375. 
C) $620. 
D) $875. 
E) $1,120. 
A) 0. 
B) $375. 
C) $620. 
D) $875. 
E) $1,120.

Question 7

Table 5.3 shows Sam's marginal utility for Goods A,B,C,and
C.
b)212 utils.
D.
Table 5.3
   
Suppose the prices for Good A,B,C,and D are $5,$8,$20,and $3 respectively.If Sam's budget of $62,what is the Sam's consumption bundle?
What is his total utility?
   
a)Sam's consumption bundle will be 4 units of Good A and 2 units each of Goods B,D,and 1 unit of

Accepted Answer

a)Sam's consumption bundle wil

Question 8

The following table shows Ketta's total utility for coffee and croissants.
  
-Refer to Table 5.16 to answer this question.If Ketta has a budget of $15 and the price of croissants is $3,but the price of coffees is $2,what will be her optimal purchase?

Accepted Answer

A) 5 croissants. 
B) 3 coffees and 2 croissants 
C) 3 coffees and 3 croissants 
D) 4 coffees and 3 croissants. 
E) 6 coffees and 1 croissant. 
A) 5 croissants. 
B) 3 coffees and 2 croissants 
C) 3 coffees and 3 croissants 
D) 4 coffees and 3 croissants. 
E) 6 coffees and 1 croissant.

Question 9

-Refer to Table 5.15 to answer this question.Suppose that the price of both apples and bananas is $1 each and this consumer has $8 to spend.In order to maximize her total utility,how many of each should she purchase?

Accepted Answer

A) 3 apples and 5 bananas. 
B) 4 apples and 4 bananas. 
C) 5 apples and 3 bananas. 
D) 8 apples. 
E) 8 bananas. 
A) 3 apples and 5 bananas. 
B) 4 apples and 4 bananas. 
C) 5 apples and 3 bananas. 
D) 8 apples. 
E) 8 bananas.

Question 10

When is marginal utility equal to zero?

Accepted Answer

A) When TU is zero. 
B) When MU is at its maximum. 
C) When TU is at its maximum. 
D) When MU is at its minimum. 
A) When TU is zero. 
B) When MU is at its maximum. 
C) When TU is at its maximum. 
D) When MU is at its minimum.

Question 11

Assume the utility Janet obtains from consuming apples is given in the table below.
   (a)At what point does diminishing marginal utility set in?
(b)If apples were freely given away at zero cost,how many apples would she choose to consume?
(c)If Janet is at her level of maximum utility from apple consumption,what will happen to her level of utility if she consumes an additional apple?

Accepted Answer

(a)Marginal utility is always diminishin

Question 12

What concept explains why a consumer should purchase the product which yields the greatest marginal utility per dollar spent?

Accepted Answer

A) Law of diminishing marginal utility. 
B) Law of diminishing returns. 
C) Optimal purchasing rule. 
D) Consumer surplus rule. 
A) Law of diminishing marginal utility. 
B) Law of diminishing returns. 
C) Optimal purchasing rule. 
D) Consumer surplus rule.

Question 13

Under which of the following circumstances will consumers' surplus be greatest?

Accepted Answer

A) When price is high and demand is elastic. 
B) When price is low and demand is inelastic. 
C) When price is low and demand is elastic. 
D) When price is high and demand is inelastic. 
A) When price is high and demand is elastic. 
B) When price is low and demand is inelastic. 
C) When price is low and demand is elastic. 
D) When price is high and demand is inelastic.

Question 14

The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
  
-Refer to the above information to answer this question.If the price of both water and diamonds is $120 per unit,and Lisa has $720 to spend,how many units of each would she purchase?

Accepted Answer

A) 6 water. 
B) 4 water and 2 diamonds. 
C) 3 water and 3 diamonds. 
D) 2 water and 3 diamonds. 
E) 2 water and 4 diamonds. 
A) 6 water. 
B) 4 water and 2 diamonds. 
C) 3 water and 3 diamonds. 
D) 2 water and 3 diamonds. 
E) 2 water and 4 diamonds.

Question 15

Price discrimination cannot be practiced if consumers are able to resell the product.

Accepted Answer

A) True 
 B)False

Question 16

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.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?

Accepted Answer

A) 10. 
B) 14. 
C) 80. 
D) 124. 
E) 130. 
A) 10. 
B) 14. 
C) 80. 
D) 124. 
E) 130.

Question 17

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 cranberry juice is free,how many glasses will she consume?

Accepted Answer

A) 0 glasses. 
B) 10 glasses. 
C) 11 glasses. 
D) 13 glasses. 
E) Cannot be determined. 
A) 0 glasses. 
B) 10 glasses. 
C) 11 glasses. 
D) 13 glasses. 
E) Cannot be determined.

Question 18

Define the following: a)utility b)marginal utility c)the law of diminishing marginal utility.

Accepted Answer

a)utility:the satisfaction or pleasure d

Question 19

The following table shows Ketta's utility for eggs and bacon.
  
-Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?

Accepted Answer

A) 0 egg and 8 bacon. 
B) 1 egg and 6 bacon. 
C) 2 eggs and 4 bacon. 
D) 3 eggs and 2 bacon. 
E) 4 eggs and 0 bacon. 
A) 0 egg and 8 bacon. 
B) 1 egg and 6 bacon. 
C) 2 eggs and 4 bacon. 
D) 3 eggs and 2 bacon. 
E) 4 eggs and 0 bacon.

Question 20

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.
  
-Assume that Gina is allocating her budget optimally between two products.If the MU of product X is 40 and its price is $8,what must be the price of product Y if its MU is 60?

Accepted Answer

A) $7.50. 
B) $12. 
C) $16. 
D) $40. 
E) $300. 
A) $7.50. 
B) $12. 
C) $16. 
D) $40. 
E) $300.

-Refer to Table 5.14 to answer this question.What are the missing numbers in the total utility column?

What does the law of diminishing marginal utility state?

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,the price of bagels is $1 and cider is $2,what will be his optimal purchase?

-Refer to Figure 5.5 to answer this question.If partial units cannot be purchased,what is the value of total consumer surplus at a price of $5?

The following table shows Ketta's total utility for coffee and croissants. -Refer to Table 5.16 to answer this question.If Ketta has a budget of $15 and the price of croissants is $3,but the price of coffees is $2,what will be her optimal purchase?

-Refer to Table 5.15 to answer this question.Suppose that the price of both apples and bananas is $1 each and this consumer has $8 to spend.In order to maximize her total utility,how many of each should she purchase?

When is marginal utility equal to zero?

What concept explains why a consumer should purchase the product which yields the greatest marginal utility per dollar spent?

Under which of the following circumstances will consumers' surplus be greatest?

Price discrimination cannot be practiced if consumers are able to resell the product.

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.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?

Define the following: a)utility b)marginal utility c)the law of diminishing marginal utility.

The following table shows Ketta's utility for eggs and bacon. -Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?

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

-Refer to Table 5.14 to answer this question.What are the missing numbers in the total utility column?

What does the law of diminishing marginal utility state?

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,the price of bagels is $1 and cider is $2,what will be his optimal purchase?

-Refer to Figure 5.5 to answer this question.If partial units cannot be purchased,what is the value of total consumer surplus at a price of $5?

The following table shows Ketta's total utility for coffee and croissants. -Refer to Table 5.16 to answer this question.If Ketta has a budget of $15 and the price of croissants is $3,but the price of coffees is $2,what will be her optimal purchase?

-Refer to Table 5.15 to answer this question.Suppose that the price of both apples and bananas is $1 each and this consumer has $8 to spend.In order to maximize her total utility,how many of each should she purchase?

When is marginal utility equal to zero?

What concept explains why a consumer should purchase the product which yields the greatest marginal utility per dollar spent?

Under which of the following circumstances will consumers' surplus be greatest?

Price discrimination cannot be practiced if consumers are able to resell the product.

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.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?

Define the following: a)utility b)marginal utility c)the law of diminishing marginal utility.

The following table shows Ketta's utility for eggs and bacon. -Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?

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