Question 1

It is the marginal utility of the last unit consumed that determines how much a consumer is prepared to pay for a product.

Accepted Answer

A) True 
 B)False

Question 2

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.
  
-According to consumer research,what happens to the proportion of disposable income which is spent by Canadians on the various product groups as the level of income increases?

Accepted Answer

A) The fraction spent on both food and travel increases whereas the amount spent on shelter decreases. 
B) The fraction spent on both food and shelter decreases whereas the amount spent on travel increases. 
C) The fraction spent on both food and travel decreases whereas the amount spent on shelter increases. 
D) The fraction spent on food decreases whereas the amount spent on both travel and shelter increases. 
A) The fraction spent on both food and travel increases whereas the amount spent on shelter decreases. 
B) The fraction spent on both food and shelter decreases whereas the amount spent on travel increases. 
C) The fraction spent on both food and travel decreases whereas the amount spent on shelter increases. 
D) The fraction spent on food decreases whereas the amount spent on both travel and shelter increases.

Question 3

Price discrimination is the practice of charging different prices for different products.

Accepted Answer

A) True 
 B)False

Question 4

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 the total utility of his optimal purchase?

Accepted Answer

A) 9 utils. 
B) 10 utils. 
C) 21 utils. 
D) 87 utils. 
E) 97 utils. 
A) 9 utils. 
B) 10 utils. 
C) 21 utils. 
D) 87 utils. 
E) 97 utils.

Question 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 both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?

Accepted Answer

A) 66 utils. 
B) 126 utils. 
C) 136 utils. 
D) 363 utils. 
E) 423 utils. 
A) 66 utils. 
B) 126 utils. 
C) 136 utils. 
D) 363 utils. 
E) 423 utils.

Question 6

Explain why a rational consumer does not spend all of her income buying only her favorite product.

Accepted Answer

A rational consumer does not spend all o

Question 7

Which of the following products are likely to yield the greatest amount of consumer surplus?

Accepted Answer

A) Water. 
B) Diamonds. 
C) Ice cream. 
D) A Persian carpet. 
A) Water. 
B) Diamonds. 
C) Ice cream. 
D) A Persian carpet.

Question 8

Suppose that MUC/PC A/PA,MUC/PC = MUB/PB,and MUC/PC > MUD/PD,which good should be your next purchase?

Accepted Answer

Question 9

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 both milk and cookies are $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his 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 10

-Refer to the graph above to answer this question.What is the maximum price that would be paid by this consumer,assuming that partial units cannot be purchased?

Accepted Answer

A) $9. 
B) $10. 
C) $16. 
D) $18. 
E) Cannot be determined. 
A) $9. 
B) $10. 
C) $16. 
D) $18. 
E) Cannot be determined.

Question 11

"If marginal utility is decreasing,then total utility must also be decreasing".Is this correct?

Accepted Answer

No this is incorrect.It doesn't matter w

Question 12

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,how much consumer surplus will Mia receive as a result of her purchases?

Accepted Answer

A) 0. 
B) $1. 
C) $15. 
D) $35. 
E) Cannot be determined. 
A) 0. 
B) $1. 
C) $15. 
D) $35. 
E) Cannot be determined.

Question 13

Marginal utility is the additional utility derived from the consumption of one more unit of a product.

Accepted Answer

A) True 
 B)False

Question 14

If the MU per dollar spent on product A is greater than on product B,then a rational consumer should consume more of product B to compensate.

Accepted Answer

A) True 
 B)False

Question 15

Yoko has $10 to spend on lunch.The deli doesn't have a very extensive menu: pears at $0.75 each;bagels at $1.50 each and cappuccino at $2 each.Given her utility figures in the table below,how should she allocate her $10?

Accepted Answer

2 pears;3

Question 16

Table 5.8 shows Jacintha's marginal utility for Goods A and B.
  
a)Suppose Jacintha's budget is $12 and PA = PB = $2,should she spend her entire budget? Explain why or why not.
b)Suppose Jacintha's budget is $20 and PA = PB = $2,should she spend her entire budget? Explain why or why not.

Accepted Answer

a)Yes,Jacintha should spend her entire b

Question 17

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 $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?

Accepted Answer

A) 5 bacon. 
B) 1 egg and 4 bacon. 
C) 2 eggs and 3 bacon. 
D) 3 eggs and 2 bacon. 
E) 4 eggs and 1 bacon. 
A) 5 bacon. 
B) 1 egg and 4 bacon. 
C) 2 eggs and 3 bacon. 
D) 3 eggs and 2 bacon. 
E) 4 eggs and 1 bacon.

Question 18

Suppose that the price of a plate of sushi is $10 and that Jan's marginal utility is 8 while Jin's marginal utility is 12.What can be deduced from this information?

Accepted Answer

A) That Jin should buy the sushi,but Jan should not. 
B) That Jin likes sushi better than does Jan. 
C) That Jan's MU per $ spent on sushi is greater than Jin's. 
D) No deductions can be made from this information. 
A) That Jin should buy the sushi,but Jan should not. 
B) That Jin likes sushi better than does Jan. 
C) That Jan's MU per $ spent on sushi is greater than Jin's. 
D) No deductions can be made from this information.

Question 19

What is the significance of the marginal utility being equal to zero?

Accepted Answer

Marginal utility is the additional amoun

Question 20

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 expenditure if the price of each kilogram of blueberries is $2?

Accepted Answer

A) $2. 
B) $4. 
C) $6. 
D) $12. 
E) Cannot be determined. 
A) $2. 
B) $4. 
C) $6. 
D) $12. 
E) Cannot be determined.

It is the marginal utility of the last unit consumed that determines how much a consumer is prepared to pay for a product.

Price discrimination is the practice of charging different prices for different products.

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 the total utility of his optimal purchase?

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 the total utility of her optimal purchase?

Explain why a rational consumer does not spend all of her income buying only her favorite product.

Which of the following products are likely to yield the greatest amount of consumer surplus?

Suppose that MU_C/P_C < MU_A/P_A,MU_C/P_C = MU_B/P_B,and MU_C/P_C > MU_D/P_D,which good should be your next purchase?

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 both milk and cookies are $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?

-Refer to the graph above to answer this question.What is the maximum price that would be paid by this consumer,assuming that partial units cannot be purchased?

"If marginal utility is decreasing,then total utility must also be decreasing".Is this correct?

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,how much consumer surplus will Mia receive as a result of her purchases?

Marginal utility is the additional utility derived from the consumption of one more unit of a product.

If the MU per dollar spent on product A is greater than on product B,then a rational consumer should consume more of product B to compensate.

Yoko has $10 to spend on lunch.The deli doesn't have a very extensive menu: pears at $0.75 each;bagels at $1.50 each and cappuccino at $2 each.Given her utility figures in the table below,how should she allocate her $10?

Table 5.8 shows Jacintha's marginal utility for Goods A and B. a)Suppose Jacintha's budget is $12 and P_A = P_B = $2,should she spend her entire budget? Explain why or why not. b)Suppose Jacintha's budget is $20 and P_A = P_B = $2,should she spend her entire budget? Explain why or why not.

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 $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?

Suppose that the price of a plate of sushi is $10 and that Jan's marginal utility is 8 while Jin's marginal utility is 12.What can be deduced from this information?

What is the significance of the marginal utility being equal to zero?

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

It is the marginal utility of the last unit consumed that determines how much a consumer is prepared to pay for a product.

Price discrimination is the practice of charging different prices for different products.

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 the total utility of his optimal purchase?

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 the total utility of her optimal purchase?

Explain why a rational consumer does not spend all of her income buying only her favorite product.

Which of the following products are likely to yield the greatest amount of consumer surplus?

Suppose that MUC/PC < MUA/PA,MUC/PC = MUB/PB,and MUC/PC > MUD/PD,which good should be your next purchase?

-Refer to the graph above to answer this question.What is the maximum price that would be paid by this consumer,assuming that partial units cannot be purchased?

"If marginal utility is decreasing,then total utility must also be decreasing".Is this correct?

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,how much consumer surplus will Mia receive as a result of her purchases?

Marginal utility is the additional utility derived from the consumption of one more unit of a product.

If the MU per dollar spent on product A is greater than on product B,then a rational consumer should consume more of product B to compensate.

Yoko has $10 to spend on lunch.The deli doesn't have a very extensive menu: pears at $0.75 each;bagels at $1.50 each and cappuccino at $2 each.Given her utility figures in the table below,how should she allocate her $10?

Table 5.8 shows Jacintha's marginal utility for Goods A and B. a)Suppose Jacintha's budget is $12 and PA = PB = $2,should she spend her entire budget? Explain why or why not. b)Suppose Jacintha's budget is $20 and PA = PB = $2,should she spend her entire budget? Explain why or why not.

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 $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?

Suppose that the price of a plate of sushi is $10 and that Jan's marginal utility is 8 while Jin's marginal utility is 12.What can be deduced from this information?

What is the significance of the marginal utility being equal to zero?

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

Suppose that MU_C/P_C < MU_A/P_A,MU_C/P_C = MU_B/P_B,and MU_C/P_C > MU_D/P_D,which good should be your next purchase?

Table 5.8 shows Jacintha's marginal utility for Goods A and B. a)Suppose Jacintha's budget is $12 and P_A = P_B = $2,should she spend her entire budget? Explain why or why not. b)Suppose Jacintha's budget is $20 and P_A = P_B = $2,should she spend her entire budget? Explain why or why not.