Question 1

Individuals behave so as to maximize their utility.

Accepted Answer

A) True 
 B)False

Question 2

The shorter the period of time being considered, the less rapidly will diminishing marginal utility set in.

Accepted Answer

A) True 
 B)False

Question 3

Suppose two out for coffee and donuts at the local donut store.The first donut you eat tastes incredibly good.The second one also tastes pretty good.The third donut seems just okay.With the fourth donut you are turning somewhat green.The fifth donut makes you sick.Your friend, an economist, describes your experience as the principle of:

Accepted Answer

A) utility maximization. 
B) irrationality in consumer behavior. 
C) instant gratification. 
D) differing tastes and preferences. 
E) diminishing marginal utility. 
A) utility maximization. 
B) irrationality in consumer behavior. 
C) instant gratification. 
D) differing tastes and preferences. 
E) diminishing marginal utility.

Question 4

According to Table 6.1, which of the following units of the good yields disutility?

Accepted Answer

A) Units 1 and 4 
B) Units 2 and 3 
C) Unit 3 
D) Units 3, 4, and 5 
E) Units 4 and 5 
A) Units 1 and 4 
B) Units 2 and 3 
C) Unit 3 
D) Units 3, 4, and 5 
E) Units 4 and 5

Question 5

_____ is a measure of the total satisfaction derived from consuming a quantity of some good or service.

Accepted Answer

A) Disutility 
B) Diminishing marginal utility 
C) Total utility 
D) Marginal utility 
E) Ordinal utility 
A) Disutility 
B) Diminishing marginal utility 
C) Total utility 
D) Marginal utility 
E) Ordinal utility

Question 6

According to Table 6.1, marginal utility _____.

Accepted Answer

A) increases from the first unit to the third unit and then declines 
B) decreases from the third unit to the fifth unit only 
C) increases from the first unit to the third unit and decreases from the third unit to the fifth unit 
D) decreases from the first unit to the fifth unit 
E) increases from the fourth unit 
A) increases from the first unit to the third unit and then declines 
B) decreases from the third unit to the fifth unit only 
C) increases from the first unit to the third unit and decreases from the third unit to the fifth unit 
D) decreases from the first unit to the fifth unit 
E) increases from the fourth unit

Question 7

Utility is most closely defined as _____.

Accepted Answer

A) the purchasing power of individuals 
B) welfare maximization 
C) a medium of exchange 
D) satisfaction 
E) an opportunity cost 
A) the purchasing power of individuals 
B) welfare maximization 
C) a medium of exchange 
D) satisfaction 
E) an opportunity cost

Question 8

The different combinations of any two goods that an individual can afford to purchase, given his income and prices, is shown by:

Accepted Answer

A) an indifference curve. 
B) an indifference map. 
C) a budget line. 
D) a demand curve. 
E) a supply curve. 
A) an indifference curve. 
B) an indifference map. 
C) a budget line. 
D) a demand curve. 
E) a supply curve.

Question 9

The demand curve for a product can be derived from consumer equilibrium by:

Accepted Answer

A) altering the prices of all other products. 
B) altering consumer incomes. 
C) shifting consumer preferences. 
D) altering the price of the good itself. 
E) knowing the demand curves for all other products. 
A) altering the prices of all other products. 
B) altering consumer incomes. 
C) shifting consumer preferences. 
D) altering the price of the good itself. 
E) knowing the demand curves for all other products.

Question 10

As long as the marginal utilities per dollar obtained from the last unit of all products consumed are the same, _____.

Accepted Answer

A) the consumer is in equilibrium and will not reallocate income 
B) the consumer is not in equilibrium and will reallocate income 
C) the consumer is most likely operating a budget deficit 
D) the consumer is not maximizing utility 
E) the government will recognize this as an intolerable disequilibrium and will most likely intervene by imposing a tax and reallocate the consumer's income 
A) the consumer is in equilibrium and will not reallocate income 
B) the consumer is not in equilibrium and will reallocate income 
C) the consumer is most likely operating a budget deficit 
D) the consumer is not maximizing utility 
E) the government will recognize this as an intolerable disequilibrium and will most likely intervene by imposing a tax and reallocate the consumer's income

Question 11

Other things equal, if there is a price increase of a good measured on the vertical axis, the budget constraint will shift outward.

Accepted Answer

A) True 
 B)False

Question 12

The table given below records the total utility derived from the consumption of avocados. Table 6.2
  According to Table 6.2, the marginal utility of the third avocado is _____.

Accepted Answer

A) 12 
B) 8 
C) 48 
D) 18 
E) 4 
A) 12 
B) 8 
C) 48 
D) 18 
E) 4

Exam 36: Consumer Choice

Individuals behave so as to maximize their utility.

The shorter the period of time being considered, the less rapidly will diminishing marginal utility set in.

According to Table 6.1, which of the following units of the good yields disutility?

_____ is a measure of the total satisfaction derived from consuming a quantity of some good or service.

According to Table 6.1, marginal utility _____.

Utility is most closely defined as _____.

The different combinations of any two goods that an individual can afford to purchase, given his income and prices, is shown by:

The demand curve for a product can be derived from consumer equilibrium by:

As long as the marginal utilities per dollar obtained from the last unit of all products consumed are the same, _____.

Other things equal, if there is a price increase of a good measured on the vertical axis, the budget constraint will shift outward.

The table given below records the total utility derived from the consumption of avocados. Table 6.2 According to Table 6.2, the marginal utility of the third avocado is _____.

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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