Question 1

In the above figure, budget line DF would swivel in to the left if

Accepted Answer

A)  the price of bagels increased. 
B)  the price of bagels decreased. 
C)  the price of coffee increased. 
D)  the price of coffee decreased. 
A)  the price of bagels increased. 
B)  the price of bagels decreased. 
C)  the price of coffee increased. 
D)  the price of coffee decreased.

Question 2

For any two goods, A and B, if MUA divided by PA equals 2.5 and MUB divided by PB equals 4.0, then with given income and prices the consumer should

Accepted Answer

A)  buy more of good A and less of good B. 
B)  buy more of good B and less of good A. 
C)  buy all of good B and no A. 
D)  stop because an equilibrium is achieved. 
A)  buy more of good A and less of good B. 
B)  buy more of good B and less of good A. 
C)  buy all of good B and no A. 
D)  stop because an equilibrium is achieved.

Question 3

-In the above table, how many hotdogs and beers will Carl consume if the price of one hotdog is $2.00 and the price of a beer is $2.00?

Accepted Answer

A)  1 hotdog and 3 beers 
B)  2 hotdogs and 2 beers 
C)  2 hotdogs and 3 beers 
D)  3 hotdogs and 1 beer 
A)  1 hotdog and 3 beers 
B)  2 hotdogs and 2 beers 
C)  2 hotdogs and 3 beers 
D)  3 hotdogs and 1 beer

Question 4

If the quantity of hamburgers is measured along the horizontal axis and the quantity of movies is measured along the vertical axis, an increase in the price of a movie would be shown by

Accepted Answer

A)  shifting the budget constraint in towards the origin. 
B)  shifting the budget constraint out. 
C)  rotating the budget constraint around the horizontal intercept such that the new vertical intercept is closer to the origin. 
D)  making the budget constraint steeper. 
A)  shifting the budget constraint in towards the origin. 
B)  shifting the budget constraint out. 
C)  rotating the budget constraint around the horizontal intercept such that the new vertical intercept is closer to the origin. 
D)  making the budget constraint steeper.

Question 5

-Given the above figure, when David eats a third piece of pizza his marginal utility is ________ and his total utility is ________.

Accepted Answer

A)  falling; falling 
B)  falling; rising 
C)  rising; falling 
D)  rising; rising 
A)  falling; falling 
B)  falling; rising 
C)  rising; falling 
D)  rising; rising

Question 6

The marginal rate of substitution is the

Accepted Answer

A)  rate at which the consumer can exchange one good for the other. 
B)  change in the quantity of one good that just offsets a one-unit change in the consumption of another good such that the total satisfaction remains constant. 
C)  change in the quantity of one good that changes the utility received by one unit. 
D)  same thing as the marginal utility of a good. 
A)  rate at which the consumer can exchange one good for the other. 
B)  change in the quantity of one good that just offsets a one-unit change in the consumption of another good such that the total satisfaction remains constant. 
C)  change in the quantity of one good that changes the utility received by one unit. 
D)  same thing as the marginal utility of a good.

Question 7

-According to the above table, Bill's marginal utility from watching the 9th movie is

Accepted Answer

A)  405 units of utility. 
B)  0 units of utility. 
C)  15 units of utility. 
D)  10 units of utility. 
A)  405 units of utility. 
B)  0 units of utility. 
C)  15 units of utility. 
D)  10 units of utility.

Question 8

An indifference curve

Accepted Answer

A)  must slope downward towards the right. 
B)  is positively sloped. 
C)  is upsloping and is concave to the origin. 
D)  may be upsloping or downsloping, depending on whether the two products are complements or substitutes. 
A)  must slope downward towards the right. 
B)  is positively sloped. 
C)  is upsloping and is concave to the origin. 
D)  may be upsloping or downsloping, depending on whether the two products are complements or substitutes.

Question 9

The real-income effect of a price change is most significant when

Accepted Answer

A)  the substitution effect is insignificant. 
B)  the substitution effect is significant too. 
C)  the good under consideration constitutes a major portion of the consumer's budget. 
D)  the marginal utility per dollar spent on the last unit is high. 
A)  the substitution effect is insignificant. 
B)  the substitution effect is significant too. 
C)  the good under consideration constitutes a major portion of the consumer's budget. 
D)  the marginal utility per dollar spent on the last unit is high.

Question 10

-Refer to the above table. Dave's utility schedule is characterized by

Accepted Answer

A)  diminishing marginal utility. 
B)  increasing marginal utility. 
C)  constant marginal utility. 
D)  constant total utility. 
A)  diminishing marginal utility. 
B)  increasing marginal utility. 
C)  constant marginal utility. 
D)  constant total utility.

Question 11

When marginal utility is decreasing but still positive, then total utility is

Accepted Answer

A)  increasing at a decreasing rate. 
B)  negative. 
C)  decreasing. 
D)  increasing at an increasing rate. 
A)  increasing at a decreasing rate. 
B)  negative. 
C)  decreasing. 
D)  increasing at an increasing rate.

Question 12

Assuming that the marginal utility of the first four pieces of candy was 30, 28, 22, and 20 respectively, how much total utility was derived from eating the first three pieces of candy?

Accepted Answer

A)  58 
B)  80 
C)  22 
D)  100 
A)  58 
B)  80 
C)  22 
D)  100

Question 13

-Using the above table, what is the total utility of consuming 2 bottles of soda?

Accepted Answer

A)  115 
B)  120 
C)  140 
D)  240 
A)  115 
B)  120 
C)  140 
D)  240

Question 14

John is going to spend all of his income. For the last unit of Good X consumed John gets 20 utils and for the last unit of Good Y consumed he gets 10 utils. The price of Good X is $1. The price of Good Y is $10. If John wants to maximize his utility he should

Accepted Answer

A)  continue to purchase the same amount of Good X and Good Y. 
B)  increase the consumption of Good X and decrease the consumption of Good Y. 
C)  decrease the consumption of Good X and increase the consumption of Good Y. 
D)  decrease the consumption of Good X and decrease the consumption of Good Y. 
A)  continue to purchase the same amount of Good X and Good Y. 
B)  increase the consumption of Good X and decrease the consumption of Good Y. 
C)  decrease the consumption of Good X and increase the consumption of Good Y. 
D)  decrease the consumption of Good X and decrease the consumption of Good Y.

Question 15

In economics, another term for satisfaction is

Accepted Answer

A)  scarcity. 
B)  need. 
C)  utility. 
D)  return. 
A)  scarcity. 
B)  need. 
C)  utility. 
D)  return.

Question 16

The marginal utility of good X is 6 and the marginal utility of good Y is 18. The price of good X is $2. The price of good Y must be ________ if the consumer is optimizing her utility.

Accepted Answer

A)  $5 
B)  $6 
C)  $18 
D)  $15 
A)  $5 
B)  $6 
C)  $18 
D)  $15

Question 17

Along a given indifference curve, a consumer reduces the quantity of one good in favor of more units of the other. In this situation

Accepted Answer

A)  the marginal rate of substitution falls. 
B)  the marginal utility of the first rises and the marginal utility of the second good falls. 
C)  total utility rises. 
D)  both A and B are correct. 
A)  the marginal rate of substitution falls. 
B)  the marginal utility of the first rises and the marginal utility of the second good falls. 
C)  total utility rises. 
D)  both A and B are correct.

Question 18

-Using the above table, what is the total utility of the first piece of pizza?

Accepted Answer

A)  0 utils 
B)  50 utils 
C)  75 utils 
D)  100 utils 
A)  0 utils 
B)  50 utils 
C)  75 utils 
D)  100 utils

Question 19

Suppose that the quantity of hamburgers is measured along the vertical axis and that the number of bags of popcorn is measured along the horizontal axis. The budget constraint has a vertical intercept of 10 hamburgers, and the slope of the line is -1. If the price of popcorn doubles, we know that

Accepted Answer

A)  the consumer will buy half as many bags of popcorn as before. 
B)  the new equilibrium will have a marginal rate of substitution of -2. 
C)  the new equilibrium will have a marginal rate of substitution of -0.5. 
D)  the vertical axis of the budget line shifts to 5 hamburgers. 
A)  the consumer will buy half as many bags of popcorn as before. 
B)  the new equilibrium will have a marginal rate of substitution of -2. 
C)  the new equilibrium will have a marginal rate of substitution of -0.5. 
D)  the vertical axis of the budget line shifts to 5 hamburgers.

Question 20

-Using the above table, what is the total utility of the third piece of pizza?

Accepted Answer

A)  75 utils 
B)  0 utils 
C)  25 utils 
D)  -25 utils 
A)  75 utils 
B)  0 utils 
C)  25 utils 
D)  -25 utils

Exam 20: Consumer Choice

In the above figure, budget line DF would swivel in to the left if

For any two goods, A and B, if MUA divided by PA equals 2.5 and MUB divided by PB equals 4.0, then with given income and prices the consumer should

-In the above table, how many hotdogs and beers will Carl consume if the price of one hotdog is $2.00 and the price of a beer is $2.00?

If the quantity of hamburgers is measured along the horizontal axis and the quantity of movies is measured along the vertical axis, an increase in the price of a movie would be shown by

-Given the above figure, when David eats a third piece of pizza his marginal utility is ________ and his total utility is ________.

The marginal rate of substitution is the

-According to the above table, Bill's marginal utility from watching the 9th movie is

An indifference curve

The real-income effect of a price change is most significant when

-Refer to the above table. Dave's utility schedule is characterized by

When marginal utility is decreasing but still positive, then total utility is

Assuming that the marginal utility of the first four pieces of candy was 30, 28, 22, and 20 respectively, how much total utility was derived from eating the first three pieces of candy?

-Using the above table, what is the total utility of consuming 2 bottles of soda?

John is going to spend all of his income. For the last unit of Good X consumed John gets 20 utils and for the last unit of Good Y consumed he gets 10 utils. The price of Good X is $1. The price of Good Y is $10. If John wants to maximize his utility he should

In economics, another term for satisfaction is

The marginal utility of good X is 6 and the marginal utility of good Y is 18. The price of good X is $2. The price of good Y must be ________ if the consumer is optimizing her utility.

Along a given indifference curve, a consumer reduces the quantity of one good in favor of more units of the other. In this situation

-Using the above table, what is the total utility of the first piece of pizza?

Suppose that the quantity of hamburgers is measured along the vertical axis and that the number of bags of popcorn is measured along the horizontal axis. The budget constraint has a vertical intercept of 10 hamburgers, and the slope of the line is -1. If the price of popcorn doubles, we know that

-Using the above table, what is the total utility of the third piece of pizza?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

-Given the above figure, when David eats a third piece of pizza his marginal utility is and his total utility is .