Question 1

Given Jon's marginal utility form consuming packets of potato chips below,calculate his total utility for each quantity.

Accepted Answer

The answer of Given Jon's marginal utility form consuming packets...

Question 2

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.Which of the following combinations will give Sandeep the greatest total utility?

Accepted Answer

A) 2 milk and 5 cookies. 
B) 3 milk and 4 cookies. 
C) 4 milk and 3 cookies. 
D) 5 milk and 2 cookies. 
E) 6 milk and 1 cookie. 
A) 2 milk and 5 cookies. 
B) 3 milk and 4 cookies. 
C) 4 milk and 3 cookies. 
D) 5 milk and 2 cookies. 
E) 6 milk and 1 cookie.

Question 3

When is total utility at a maximum?

Accepted Answer

A) When marginal utility is at a maximum. 
B) When marginal utility is zero. 
C) When marginal utility is equal to total utility. 
D) When marginal utility is greater than total utility. 
A) When marginal utility is at a maximum. 
B) When marginal utility is zero. 
C) When marginal utility is equal to total utility. 
D) When marginal utility is greater than total utility.

Question 4

-Refer to the above information to answer this question.How many units should this consumer purchase?

Accepted Answer

A) 0. 
B) 1. 
C) 7. 
D) 8. 
E) Cannot be determined. 
A) 0. 
B) 1. 
C) 7. 
D) 8. 
E) Cannot be determined.

Question 5

What is meant by the term margin?

Accepted Answer

A) A measure of desire. 
B) The extra or additional unit. 
C) A measure of the ability to purchase. 
D) The difference between the total and the average. 
A) A measure of desire. 
B) The extra or additional unit. 
C) A measure of the ability to purchase. 
D) The difference between the total and the average.

Question 6

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.
-Which of the following statements is correct regarding demand and consumer surplus?

Accepted Answer

A) The greater the elasticity of demand,the greater will be the consumer surplus. 
B) The greater the elasticity of demand,the smaller will be the consumer surplus. 
C) The greater the number of substitutes for a product,the greater will be the consumer surplus. 
D) The smaller the elasticity of demand,the smaller will be the consumer surplus. 
A) The greater the elasticity of demand,the greater will be the consumer surplus. 
B) The greater the elasticity of demand,the smaller will be the consumer surplus. 
C) The greater the number of substitutes for a product,the greater will be the consumer surplus. 
D) The smaller the elasticity of demand,the smaller will be the consumer surplus.

Question 7

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.
  
-Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.How should she allocate her spending so as to maximize her total utility?

Accepted Answer

A) 2 apples and 4 bagels. 
B) 2 apples,2 bagels and 1 cappuccino. 
C) 2 apples and 2 cappuccinos. 
D) 1 bagel and 2 cappuccinos. 
E) 3 bagels and 1 cappuccino. 
A) 2 apples and 4 bagels. 
B) 2 apples,2 bagels and 1 cappuccino. 
C) 2 apples and 2 cappuccinos. 
D) 1 bagel and 2 cappuccinos. 
E) 3 bagels and 1 cappuccino.

Question 8

Can marginal utility be negative? Explain.

Accepted Answer

Yes,marginal utility can be negative.If

Question 9

Table 5.5 shows the Brian's total utility from consuming peanut butter chocolate chip cookies.
Table 5.5
   Which of the following are feasible amounts of the total utility of 4 units?

Accepted Answer

a)160 b)170 c)180
b)170
c)The marginal u

Question 10

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.
  
-In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?

Accepted Answer

A) The marginal utility from employment dollars is greater than that from investment dollars. 
B) The marginal utility from employment dollars is less than that from investment dollars. 
C) The consumer surplus derived from employment income is greater than that from investment income. 
D) The consumer surplus derived from employment income is smaller than that from investment income. 
A) The marginal utility from employment dollars is greater than that from investment dollars. 
B) The marginal utility from employment dollars is less than that from investment dollars. 
C) The consumer surplus derived from employment income is greater than that from investment income. 
D) The consumer surplus derived from employment income is smaller than that from investment income.

Question 11

-Refer to Table 5.13 to answer this question.What is the marginal utility of the 5th unit?

Accepted Answer

A) 10. 
B) 20. 
C) 100. 
D) Cannot be answered from this information. 
A) 10. 
B) 20. 
C) 100. 
D) Cannot be answered from this information.

Question 12

Table 5.6 shows Nelson's total utility for Goods A and
B.
Table 5.6
   
Suppose the prices for both Good A and B are $1 each.
a)If Nelson's budget is $3,what will his consumption bundle?
b)If Nelson's budget is $4,what will his consumption bundle?
c)If Nelson's budget is $6,what will his consumption bundle?
d)If Nelson's budget is $10,what will his consumption bundle?
a)1 unit of Good A and 2 units of Good 
B.
b)2 units of Good A and 2 units of Good
B.
c)3 units of Good A and 3 units of Good
B.
d)3 units of Good A and 4 units of Good
B.(You would not purchase more of either since the MUs of additional units are negative).

Accepted Answer

a)1 unit of Good A and 2 units of Good B

Question 13

-When is total utility at a maximum?

Accepted Answer

A) When marginal utility is maximum. 
B) When marginal utility is zero. 
C) When marginal utility is increasing 
D) When marginal utility is decreasing. 
A) When marginal utility is maximum. 
B) When marginal utility is zero. 
C) When marginal utility is increasing 
D) When marginal utility is decreasing.

Question 14

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.
  
-Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?

Accepted Answer

A) 436 utils. 
B) 508 utils. 
C) 500 utils. 
D) 526 utils. 
E) 548 utils. 
A) 436 utils. 
B) 508 utils. 
C) 500 utils. 
D) 526 utils. 
E) 548 utils.

Question 15

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.
  
-Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.How should she allocate her spending so as to maximize her total utility?

Accepted Answer

A) 2 apples,2 bagels and 2 cappuccinos. 
B) 2 apples,4 bagels and 1 cappuccino. 
C) 4 apples,1 bagel and 2 cappuccinos. 
D) 4 apples,3 bagels and 1 cappuccino. 
E) 4 apples and 5 bagels. 
A) 2 apples,2 bagels and 2 cappuccinos. 
B) 2 apples,4 bagels and 1 cappuccino. 
C) 4 apples,1 bagel and 2 cappuccinos. 
D) 4 apples,3 bagels and 1 cappuccino. 
E) 4 apples and 5 bagels.

Question 16

Utility is defined as the satisfaction or pleasure derived from the consumption of a product.

Accepted Answer

A) True 
 B)False

Question 17

The following graph shows the total utility obtained from rice crackers and beer by Carla.
  
-Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?

Accepted Answer

A) 2 crackers and 4 beers. 
B) 3 crackers and 3 beers. 
C) 3 crackers and 4 beers. 
D) 4 crackers and 3 beers. 
E) 5 crackers. 
A) 2 crackers and 4 beers. 
B) 3 crackers and 3 beers. 
C) 3 crackers and 4 beers. 
D) 4 crackers and 3 beers. 
E) 5 crackers.

Question 18

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 graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total willingness to pay for 6 kilograms of blueberries if the price of each kilogram of blueberries is $2?

Accepted Answer

A) $2. 
B) $18. 
C) $6. 
D) $12. 
E) Cannot be determined. 
A) $2. 
B) $18. 
C) $6. 
D) $12. 
E) Cannot be determined.

Question 19

You have $5 to spend on any combination of goods A and
A.The utility maximizing combination here is to buy 1 of A and 3 of
B.Are you maximizing your utility? If so,explain why.If not,what combination of goods should you buy?
(a)The completed table:
   
(b)If you purchase 2 of A and 1 of B you are not maximizing your utility.To see why not,use the utility maximizing rule.For good A compute MUA/PA = 7 and for good B compute MUB/PB = 30.Since MUB/PB > MUA/PA you are not at a utility maximizing combination of goods;you should reallocate your $5 and buy more B and less 
B.The price of good A is $2 and the price of good B is $1.You have calculated the following utility values for yourself:
   
(a)Fill in the empty columns of the table.
(b)You have purchased 2 units of good A and 1 unit of good 
B.With this latter combination we see that MUA/PA = 8 = MUB/PB and we have satisfied the utility maximizing rule.

Accepted Answer

(a)The completed table:
 @#IMG-DLM& (b)If you purc

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.
  
-Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?

Accepted Answer

A) 393 utils. 
B) 408 utils. 
C) 500 utils. 
D) 548 utils. 
E) 636 utils. 
A) 393 utils. 
B) 408 utils. 
C) 500 utils. 
D) 548 utils. 
E) 636 utils.

Given Jon's marginal utility form consuming packets of potato chips below,calculate his total utility for each quantity.

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.Which of the following combinations will give Sandeep the greatest total utility?

When is total utility at a maximum?

-Refer to the above information to answer this question.How many units should this consumer purchase?

What is meant by the term margin?

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. -Which of the following statements is correct regarding demand and consumer surplus?

Can marginal utility be negative? Explain.

Table 5.5 shows the Brian's total utility from consuming peanut butter chocolate chip cookies. Table 5.5 Which of the following are feasible amounts of the total utility of 4 units?

-Refer to Table 5.13 to answer this question.What is the marginal utility of the 5^th unit?

-When is total utility at a maximum?

Utility is defined as the satisfaction or pleasure derived from the consumption of a product.

The following graph shows the total utility obtained from rice crackers and beer by Carla. -Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?

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

Given Jon's marginal utility form consuming packets of potato chips below,calculate his total utility for each quantity.

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.Which of the following combinations will give Sandeep the greatest total utility?

When is total utility at a maximum?

-Refer to the above information to answer this question.How many units should this consumer purchase?

What is meant by the term margin?

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. -Which of the following statements is correct regarding demand and consumer surplus?

Can marginal utility be negative? Explain.

Table 5.5 shows the Brian's total utility from consuming peanut butter chocolate chip cookies. Table 5.5 Which of the following are feasible amounts of the total utility of 4 units?

-Refer to Table 5.13 to answer this question.What is the marginal utility of the 5th unit?

-When is total utility at a maximum?

Utility is defined as the satisfaction or pleasure derived from the consumption of a product.

The following graph shows the total utility obtained from rice crackers and beer by Carla. -Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?

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

-Refer to Table 5.13 to answer this question.What is the marginal utility of the 5^th unit?