Question 1

-Use the above figure. When the budget line rotates from "c" to "b"

Accepted Answer

A)  the price of product J increases and the quantity demanded of product J decreases. 
B)  the price of product J decreases and the quantity demanded of product J increases. 
C)  the price of product K increases and the quantity demanded of product K decreases. 
D)  the price of product K decreases and the quantity demanded of product K increases. 
A)  the price of product J increases and the quantity demanded of product J decreases. 
B)  the price of product J decreases and the quantity demanded of product J increases. 
C)  the price of product K increases and the quantity demanded of product K decreases. 
D)  the price of product K decreases and the quantity demanded of product K increases.

Question 2

To derive the law of demand, we assume that

Accepted Answer

A)  prices are constant. 
B)  real prices are constant. 
C)  marginal utility is constant. 
D)  tastes are constant. 
A)  prices are constant. 
B)  real prices are constant. 
C)  marginal utility is constant. 
D)  tastes are constant.

Question 3

When DVDs and hamburgers were the same price, Mavis consumed 3 hamburgers and 5 DVDs, and Mavis received 10 utils from the last hamburger and 15 utils from the last DVD consumed. What should be Mavis' consumption strategy?

Accepted Answer

A)  consume more DVDs and fewer burgers 
B)  consume more burgers and fewer DVDs 
C)  consume more of both items 
D)  consume less of both items 
A)  consume more DVDs and fewer burgers 
B)  consume more burgers and fewer DVDs 
C)  consume more of both items 
D)  consume less of both items

Question 4

-Refer to the above table. If the price of a movie download is $2 and the price of an apple pie is $5 and the consumer has $33, the rational consumer will purchase

Accepted Answer

A)  2 movies and 2 apple pies. 
B)  2 movies and 3 apple pies. 
C)  5 movies and 6 apple pies. 
D)  4 movies and 5 apple pies. 
A)  2 movies and 2 apple pies. 
B)  2 movies and 3 apple pies. 
C)  5 movies and 6 apple pies. 
D)  4 movies and 5 apple pies.

Question 5

Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. If the price of good x is $5 and the price of good y is $10 when income is $200 per time period, the slope of the consumer's budget constraint will be

Accepted Answer

A)  -0.5. 
B)  -2. 
C)  -5. 
D)  -10. 
A)  -0.5. 
B)  -2. 
C)  -5. 
D)  -10.

Question 6

Along an indifference curve

Accepted Answer

A)  every combination of goods the consumer can purchase with their income is given. 
B)  the prices of goods will change. 
C)  utility increases as you move to the right. 
D)  every combination of the goods give the same level of satisfaction. 
A)  every combination of goods the consumer can purchase with their income is given. 
B)  the prices of goods will change. 
C)  utility increases as you move to the right. 
D)  every combination of the goods give the same level of satisfaction.

Question 7

The law of demand is derived under the assumption of

Accepted Answer

A)  constant prices. 
B)  constant real incomes. 
C)  constant consumer tastes and preferences. 
D)  constant marginal utility. 
A)  constant prices. 
B)  constant real incomes. 
C)  constant consumer tastes and preferences. 
D)  constant marginal utility.

Question 8

When total utility is falling

Accepted Answer

A)  marginal utility is at a maximum. 
B)  marginal utility is at zero. 
C)  marginal utility is negative. 
D)  marginal utility has decreased, but is now increasing. 
A)  marginal utility is at a maximum. 
B)  marginal utility is at zero. 
C)  marginal utility is negative. 
D)  marginal utility has decreased, but is now increasing.

Question 9

Assume that Katie has the preferences shown in the above table. Also assume that the price of a can of Pepsi is $3.00 and that the price of a slice of pizza is $2.00. If she has $16 available to spend, what combination of Pepsi and pizza will be her consumer optimum?

Accepted Answer

A)  1 can of Pepsi, 4 slices of pizza 
B)  2 cans of Pepsi, 5 slices of pizza 
C)  4 cans of Pepsi, 2 slices of pizza 
D)  6 cans of Pepsi, 0 slices of pizza 
A)  1 can of Pepsi, 4 slices of pizza 
B)  2 cans of Pepsi, 5 slices of pizza 
C)  4 cans of Pepsi, 2 slices of pizza 
D)  6 cans of Pepsi, 0 slices of pizza

Question 10

-Use the above figure. The consumer's choice changes from YB to YA. Which of the following statements is TRUE?

Accepted Answer

A)  This change in the consumer's choice results from a rise in the price of good Y. 
B)  This change in the consumer's choice results from a fall in the price of good X. 
C)  This change in the consumer's choice results from a rise in the price of good X. 
D)  This change in the consumer's choice results from an increase in the consumer's income. 
A)  This change in the consumer's choice results from a rise in the price of good Y. 
B)  This change in the consumer's choice results from a fall in the price of good X. 
C)  This change in the consumer's choice results from a rise in the price of good X. 
D)  This change in the consumer's choice results from an increase in the consumer's income.

Question 11

-Given the above figure and suppose that David is a rational consumer, then he will NOT eat more than ________ piece(s) of pizza.

Accepted Answer

A)  1 
B)  5 
C)  4 
D)  6 
A)  1 
B)  5 
C)  4 
D)  6

Question 12

Refer to the above table. The table gives the various combinations of Good A and Good B along Jane's indifference curve. The marginal rate of substitution when Jane goes from combination C to combination D is

Accepted Answer

A)  4:1. 
B)  3:1. 
C)  2:1. 
D)  0. 
A)  4:1. 
B)  3:1. 
C)  2:1. 
D)  0.

Question 13

A consumer who has chosen the right mix of goods and services to maximize his or her utility is said to have achieved

Accepted Answer

A)  consumer equilibrium. 
B)  consumer benefit. 
C)  consumer surplus. 
D)  consumer optimum. 
A)  consumer equilibrium. 
B)  consumer benefit. 
C)  consumer surplus. 
D)  consumer optimum.

Question 14

If the total utility derived from consuming three oysters was 40 utils and the total utility derived from consuming four oysters was 62 utils, what was the marginal utility derived from the consumption of the fourth oyster?

Accepted Answer

A)  102 utils 
B)  62 utils 
C)  22 utils 
D)  It is impossible to determine. 
A)  102 utils 
B)  62 utils 
C)  22 utils 
D)  It is impossible to determine.

Question 15

Regretting the last unit of consumption of beer implies that

Accepted Answer

A)  the total utility from drinking beer is negative. 
B)  beer is an inferior good. 
C)  the marginal utility of the last unit of beer consumed is negative. 
D)  the demand curve for beer is horizontal. 
A)  the total utility from drinking beer is negative. 
B)  beer is an inferior good. 
C)  the marginal utility of the last unit of beer consumed is negative. 
D)  the demand curve for beer is horizontal.

Question 16

Assume that Juan concludes that he should eat less and play video games more. In this situation, it must be TRUE that the marginal utility of the last dollar spent on food is

Accepted Answer

A)  more than the marginal utility of the last dollar spent on video games. 
B)  less than the marginal utility of the last dollar spent on video games. 
C)  equal to the marginal utility of the last dollar spent on video games. 
D)  negative and less than the marginal utility of the last dollar spent on video games. 
A)  more than the marginal utility of the last dollar spent on video games. 
B)  less than the marginal utility of the last dollar spent on video games. 
C)  equal to the marginal utility of the last dollar spent on video games. 
D)  negative and less than the marginal utility of the last dollar spent on video games.

Question 17

Suppose Isaac's marginal utility from attending his 10th San Antonio Spurs game was 50 and the marginal utility from attending his 1st Rihanna concert was 200. Assume that the price of a Spurs ticket is $30 and the price of a Rihanna ticket is $100. Which of the following would be TRUE?

Accepted Answer

A)  Isaac would attend more Rihanna concerts and less Spurs games. 
B)  Isaac would attend more Spurs games and less Rihanna concerts. 
C)  Isaac would not alter his behavior. 
D)  Isaac would attend less of both Spurs games and Rihanna concerts. 
A)  Isaac would attend more Rihanna concerts and less Spurs games. 
B)  Isaac would attend more Spurs games and less Rihanna concerts. 
C)  Isaac would not alter his behavior. 
D)  Isaac would attend less of both Spurs games and Rihanna concerts.

Question 18

To derive the demand curve from the indifference map

Accepted Answer

A)  vary the price of one good while holding the price of the other good and income constant. 
B)  vary the prices of both goods while holding income constant. 
C)  vary the price of one good and income while holding the price of the other good constant. 
D)  vary income while holding the prices constant. 
A)  vary the price of one good while holding the price of the other good and income constant. 
B)  vary the prices of both goods while holding income constant. 
C)  vary the price of one good and income while holding the price of the other good constant. 
D)  vary income while holding the prices constant.

Question 19

Kelly has decided that she would enjoy eating another cupcake. Which of the following statements is consistent with Kelly's decision?

Accepted Answer

A)  Kelly's marginal utility has decreased with a corresponding decrease in total utility. 
B)  Kelly's marginal and total utility remain unchanged. 
C)  Kelly's marginal utility has decreased but it is unclear what has happened to total utility. 
D)  Kelly's total utility has increased but it is unclear what has happened to her marginal utility. 
A)  Kelly's marginal utility has decreased with a corresponding decrease in total utility. 
B)  Kelly's marginal and total utility remain unchanged. 
C)  Kelly's marginal utility has decreased but it is unclear what has happened to total utility. 
D)  Kelly's total utility has increased but it is unclear what has happened to her marginal utility.

Question 20

Suppose that a consumer is currently at an optimum when consuming goods A and B. Which of the following must be TRUE?

Accepted Answer

A)  The total utility from A is equal to the total utility from B. 
B)  The price of A is equal to the price of B. 
C)  The marginal utility of A is equal to the marginal utility of B. 
D)  The marginal utility to price ratio of A is equal to the marginal utility to price ratio of B. 
A)  The total utility from A is equal to the total utility from B. 
B)  The price of A is equal to the price of B. 
C)  The marginal utility of A is equal to the marginal utility of B. 
D)  The marginal utility to price ratio of A is equal to the marginal utility to price ratio of B.

Exam 20: Consumer Choice

-Use the above figure. When the budget line rotates from "c" to "b"

To derive the law of demand, we assume that

When DVDs and hamburgers were the same price, Mavis consumed 3 hamburgers and 5 DVDs, and Mavis received 10 utils from the last hamburger and 15 utils from the last DVD consumed. What should be Mavis' consumption strategy?

-Refer to the above table. If the price of a movie download is $2 and the price of an apple pie is $5 and the consumer has $33, the rational consumer will purchase

Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. If the price of good x is $5 and the price of good y is $10 when income is $200 per time period, the slope of the consumer's budget constraint will be

Along an indifference curve

The law of demand is derived under the assumption of

When total utility is falling

Assume that Katie has the preferences shown in the above table. Also assume that the price of a can of Pepsi is $3.00 and that the price of a slice of pizza is $2.00. If she has $16 available to spend, what combination of Pepsi and pizza will be her consumer optimum?

-Use the above figure. The consumer's choice changes from YB to YA. Which of the following statements is TRUE?

-Given the above figure and suppose that David is a rational consumer, then he will NOT eat more than ________ piece(s) of pizza.

Refer to the above table. The table gives the various combinations of Good A and Good B along Jane's indifference curve. The marginal rate of substitution when Jane goes from combination C to combination D is

A consumer who has chosen the right mix of goods and services to maximize his or her utility is said to have achieved

If the total utility derived from consuming three oysters was 40 utils and the total utility derived from consuming four oysters was 62 utils, what was the marginal utility derived from the consumption of the fourth oyster?

Regretting the last unit of consumption of beer implies that

Assume that Juan concludes that he should eat less and play video games more. In this situation, it must be TRUE that the marginal utility of the last dollar spent on food is

Suppose Isaac's marginal utility from attending his 10th San Antonio Spurs game was 50 and the marginal utility from attending his 1st Rihanna concert was 200. Assume that the price of a Spurs ticket is $30 and the price of a Rihanna ticket is $100. Which of the following would be TRUE?

To derive the demand curve from the indifference map

Kelly has decided that she would enjoy eating another cupcake. Which of the following statements is consistent with Kelly's decision?

Suppose that a consumer is currently at an optimum when consuming goods A and B. Which of the following must be TRUE?

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