Question 1

Which of the following statements is correct?

Accepted Answer

A)  Consumers have the ability to buy everything they desire. 
B)  A consumer's budget line shows the limits to what a consumer can buy. 
C)  A consumer's budget line shows the goods with the highest marginal utilities. 
D)  Rich consumers are unaffected by prices. 
E)  A budget line changes only if the person's budget changes. 
A)  Consumers have the ability to buy everything they desire. 
B)  A consumer's budget line shows the limits to what a consumer can buy. 
C)  A consumer's budget line shows the goods with the highest marginal utilities. 
D)  Rich consumers are unaffected by prices. 
E)  A budget line changes only if the person's budget changes.

Question 2

What is the utility-maximizing rule?

Accepted Answer

The utility-maximizing rule states that

Question 3

For a consumer,the marginal utility of good A is 25 and its price is $5.The marginal utility of good B is 60 and its price is $12.The consumer has allocated his entire budget.Is this consumer maximizing his total utility? Explain your answer.

Accepted Answer

Yes,the consumer is maximizing his utili

Question 4

"Water is very inexpensive.Thus the marginal and total utility of water is small." Analyze the previous statements.

Accepted Answer

Parts of the statement are true but a ke

Question 5

-The above table shows Homer's total utility from boxes of doughnuts.As Homer's consumption of doughnuts increases,

Accepted Answer

A)  both his total utility and his marginal utility increase. 
B)  his total utility increases, but his marginal utility decreases. 
C)  his total utility decreases, but his marginal utility increases. 
D)  both his total utility and his marginal utility decrease. 
E)  None of the above answers is correct. 
A)  both his total utility and his marginal utility increase. 
B)  his total utility increases, but his marginal utility decreases. 
C)  his total utility decreases, but his marginal utility increases. 
D)  both his total utility and his marginal utility decrease. 
E)  None of the above answers is correct.

Question 6

Billy has a $20 budget to spend on yogurt and cereal.Yogurt cost $2 each and cereal costs $4 each.Suppose that the quantity of yogurt is on the vertical axis and the quantity of cereal is on the horizontal axis.If the price of yogurt increases,which of the following is true?
i.The budget line rotates outward.
ii.Yogurt's marginal utility per dollar decreases.
iii.The relative price of yogurt increases.
A) i and ii
B) i and iii
C) ii and iii
D) i, ii, and iii
E) Only i

Accepted Answer

The answer of Billy has a $20 budget to spend...

Question 7

Bottles of Soda	Slices of Pizza
  
-The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.Ali has $14 in his budget.When Ali maximizes his utility,how many bottles of soda does he buy?

Accepted Answer

A)  fewer than 3 
B)  3 
C)  4 
D)  5 
E)  more than 5 
A)  fewer than 3 
B)  3 
C)  4 
D)  5 
E)  more than 5

Question 8

-The table above gives Jessie's marginal utility and total utility from tacos.Complete the table.

Accepted Answer

@#IMG-DLM& The compl

Question 9

We have asked Mac to rank his preferences between three market baskets,A,B,and C.If Mac prefers B to C but does not care if he gets A or B,then

Accepted Answer

A)  A is on a higher indifference curve than B. 
B)  B and C are on the same indifference curve. 
C)  both A and B are on a higher indifference curve than C. 
D)  C is on a higher indifference curve than A. 
E)  B is on a higher indifference curve than C, but it is not possible to determine whether C is on a higher, lower, or the same indifference curve as A. 
A)  A is on a higher indifference curve than B. 
B)  B and C are on the same indifference curve. 
C)  both A and B are on a higher indifference curve than C. 
D)  C is on a higher indifference curve than A. 
E)  B is on a higher indifference curve than C, but it is not possible to determine whether C is on a higher, lower, or the same indifference curve as A.

Question 10

If you consume hot dogs and hamburgers and your budget increases while the prices of hot dogs and hamburgers do not change,then your budget line

Accepted Answer

A)  does not change. 
B)  shifts outward and its slope does not change. 
C)  rotates outward and its slope changes. 
D)  shifts inward and its slope does not change. 
E)  rotates inward and its slope changes. 
A)  does not change. 
B)  shifts outward and its slope does not change. 
C)  rotates outward and its slope changes. 
D)  shifts inward and its slope does not change. 
E)  rotates inward and its slope changes.

Question 11

Suppose Jenny's marginal utility from another serving of fish is 40 and her marginal utility from another serving of chips is 20.The price of a serving of fish is $10 and the price of a serving of chips is $1.What should Jenny do to maximize her utility? Explain your answer.

Accepted Answer

Jenny should buy more chips and fewer fi

Question 12

-Chase has a budget of $14 which he must allocate between steak and cranberry juice.The table gives his marginal utility and the marginal utility per dollar for both of those goods.The price of steak is $10 per serving and the price of cranberry juice is $2 per serving.To maximize his utility,Chase should buy

Accepted Answer

A)  2 servings of steak and 2 servings of cranberry juice. 
B)  2 servings of steak and 4 servings of cranberry juice. 
C)  1 serving of steak because this has the highest marginal utility. 
D)  1 serving of steak and 2 servings of cranberry juice. 
E)  4 servings of steak and 4 servings of cranberry juice. 
A)  2 servings of steak and 2 servings of cranberry juice. 
B)  2 servings of steak and 4 servings of cranberry juice. 
C)  1 serving of steak because this has the highest marginal utility. 
D)  1 serving of steak and 2 servings of cranberry juice. 
E)  4 servings of steak and 4 servings of cranberry juice.

Question 13

Any point below a given indifference curve is

Accepted Answer

A)  inferior to any point on the indifference curve. 
B)  preferred to any point on the indifference curve. 
C)  definitely affordable. 
D)  definitely unaffordable. 
E)  More information is needed to determine if the point is or is not affordable and if the point is or is not preferred. 
A)  inferior to any point on the indifference curve. 
B)  preferred to any point on the indifference curve. 
C)  definitely affordable. 
D)  definitely unaffordable. 
E)  More information is needed to determine if the point is or is not affordable and if the point is or is not preferred.

Question 14

The marginal rate of substitution of one good for another is measured by moving

Accepted Answer

A)  along an indifference curve. 
B)  among different indifference curves. 
C)  along a budget line. 
D)  among different budget lines. 
E)  along a demand curve. 
A)  along an indifference curve. 
B)  among different indifference curves. 
C)  along a budget line. 
D)  among different budget lines. 
E)  along a demand curve.

Question 15

-The table above gives Matt's utility from consuming slices of pizza.His marginal utility from the 4th slice is

Accepted Answer

A)  30 units. 
B)  3 units. 
C)  94 units. 
D)  23.5 units. 
E)  7.5 units. 
A)  30 units. 
B)  3 units. 
C)  94 units. 
D)  23.5 units. 
E)  7.5 units.

Question 16

If the price of the good measured on the x-axis becomes relatively cheaper,the budget line will

Accepted Answer

A)  become vertical. 
B)  become steeper. 
C)  become flatter. 
D)  become horizontal. 
E)  shift rightward and not change its slope. 
A)  become vertical. 
B)  become steeper. 
C)  become flatter. 
D)  become horizontal. 
E)  shift rightward and not change its slope.

Question 17

If a person consumes only two goods,which of the following is NOT necessary for a consumer to be at his or her best affordable point of consumption?

Accepted Answer

A)  The consumer chooses a bundle of goods that lies on his or her budget line. 
B)  The consumer is on his or her highest attainable indifference curve. 
C)  The consumer chooses equal amounts of both goods. 
D)  The marginal rate of substitution between the two goods is equal to the relative price of those two goods. 
E)  The indifference curve is tangent to the budget line. 
A)  The consumer chooses a bundle of goods that lies on his or her budget line. 
B)  The consumer is on his or her highest attainable indifference curve. 
C)  The consumer chooses equal amounts of both goods. 
D)  The marginal rate of substitution between the two goods is equal to the relative price of those two goods. 
E)  The indifference curve is tangent to the budget line.

Question 18

Suppose Lizzie consumes soda and pizza.If the last bottle of soda she drinks provides 100 units of utility per dollar while the last slice of pizza she eats provides 300 units of utility per dollar,

Accepted Answer

A)  the demand curve for soda must have shifted outward. 
B)  the demand curve for pizza must have shifted inward. 
C)  Lizzie should buy more pizza and less soda to maximize her utility. 
D)  the indifference curve for soda and pizza must have rotated inward. 
E)  the marginal rate of substitution between soda and pizza equals 3. 
A)  the demand curve for soda must have shifted outward. 
B)  the demand curve for pizza must have shifted inward. 
C)  Lizzie should buy more pizza and less soda to maximize her utility. 
D)  the indifference curve for soda and pizza must have rotated inward. 
E)  the marginal rate of substitution between soda and pizza equals 3.

Question 19

The magnitude of the slope of an indifference curve at a particular point measures the

Accepted Answer

A)  total utility. 
B)  marginal utility. 
C)  marginal rate of substitution. 
D)  total rate of substitution. 
E)  demand. 
A)  total utility. 
B)  marginal utility. 
C)  marginal rate of substitution. 
D)  total rate of substitution. 
E)  demand.

Question 20

Goods that are valuable will have a ________ consumer surplus because ________ units of the good are consumed at a ________ price.

Accepted Answer

A)  large; more; lower 
B)  large; less; higher 
C)  smaller; more; lower 
D)  smaller; fewer; lower 
E)  larger; fewer; lower 
A)  large; more; lower 
B)  large; less; higher 
C)  smaller; more; lower 
D)  smaller; fewer; lower 
E)  larger; fewer; lower

Which of the following statements is correct?

What is the utility-maximizing rule?

For a consumer,the marginal utility of good A is 25 and its price is $5.The marginal utility of good B is 60 and its price is $12.The consumer has allocated his entire budget.Is this consumer maximizing his total utility? Explain your answer.

"Water is very inexpensive.Thus the marginal and total utility of water is small." Analyze the previous statements.

-The above table shows Homer's total utility from boxes of doughnuts.As Homer's consumption of doughnuts increases,

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.Ali has $14 in his budget.When Ali maximizes his utility,how many bottles of soda does he buy?

-The table above gives Jessie's marginal utility and total utility from tacos.Complete the table.

We have asked Mac to rank his preferences between three market baskets,A,B,and C.If Mac prefers B to C but does not care if he gets A or B,then

If you consume hot dogs and hamburgers and your budget increases while the prices of hot dogs and hamburgers do not change,then your budget line

Suppose Jenny's marginal utility from another serving of fish is 40 and her marginal utility from another serving of chips is 20.The price of a serving of fish is $10 and the price of a serving of chips is $1.What should Jenny do to maximize her utility? Explain your answer.

Any point below a given indifference curve is

The marginal rate of substitution of one good for another is measured by moving

-The table above gives Matt's utility from consuming slices of pizza.His marginal utility from the 4th slice is

If the price of the good measured on the x-axis becomes relatively cheaper,the budget line will

If a person consumes only two goods,which of the following is NOT necessary for a consumer to be at his or her best affordable point of consumption?

Suppose Lizzie consumes soda and pizza.If the last bottle of soda she drinks provides 100 units of utility per dollar while the last slice of pizza she eats provides 300 units of utility per dollar,

The magnitude of the slope of an indifference curve at a particular point measures the

Goods that are valuable will have a consumer surplus because units of the good are consumed at a price.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 13: Consumer Choice and Demand

Which of the following statements is correct?

What is the utility-maximizing rule?

For a consumer,the marginal utility of good A is 25 and its price is $5.The marginal utility of good B is 60 and its price is $12.The consumer has allocated his entire budget.Is this consumer maximizing his total utility? Explain your answer.

"Water is very inexpensive.Thus the marginal and total utility of water is small." Analyze the previous statements.

-The above table shows Homer's total utility from boxes of doughnuts.As Homer's consumption of doughnuts increases,

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.Ali has $14 in his budget.When Ali maximizes his utility,how many bottles of soda does he buy?

-The table above gives Jessie's marginal utility and total utility from tacos.Complete the table.

We have asked Mac to rank his preferences between three market baskets,A,B,and C.If Mac prefers B to C but does not care if he gets A or B,then

If you consume hot dogs and hamburgers and your budget increases while the prices of hot dogs and hamburgers do not change,then your budget line

Suppose Jenny's marginal utility from another serving of fish is 40 and her marginal utility from another serving of chips is 20.The price of a serving of fish is $10 and the price of a serving of chips is $1.What should Jenny do to maximize her utility? Explain your answer.

Any point below a given indifference curve is

The marginal rate of substitution of one good for another is measured by moving

-The table above gives Matt's utility from consuming slices of pizza.His marginal utility from the 4th slice is

If the price of the good measured on the x-axis becomes relatively cheaper,the budget line will

If a person consumes only two goods,which of the following is NOT necessary for a consumer to be at his or her best affordable point of consumption?

Suppose Lizzie consumes soda and pizza.If the last bottle of soda she drinks provides 100 units of utility per dollar while the last slice of pizza she eats provides 300 units of utility per dollar,

The magnitude of the slope of an indifference curve at a particular point measures the

Goods that are valuable will have a ________ consumer surplus because ________ units of the good are consumed at a ________ price.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Goods that are valuable will have a consumer surplus because units of the good are consumed at a price.