Question 1

When Chris maximizes his total utility,then his entire available budget is allocated in such a way that the

Accepted Answer

A)  marginal utility of all goods is equal. 
B)  marginal utility per dollar is equal for all goods. 
C)  marginal utility is as large as possible for goods. 
D)  marginal utility will start decreasing if it consumes fewer goods. 
E)  quantities consumed of each good are equal. 
A)  marginal utility of all goods is equal. 
B)  marginal utility per dollar is equal for all goods. 
C)  marginal utility is as large as possible for goods. 
D)  marginal utility will start decreasing if it consumes fewer goods. 
E)  quantities consumed of each good are equal.

Question 2

Bobby buys cat food for his cat,Pearl.If the price of cat food falls,then Bobby's budget line will

Accepted Answer

A)  rotate outward and its slope will change. 
B)  rotate inward and its slope will change. 
C)  shift outward and its slope will not change. 
D)  shift inward and its slope will not change. 
E)  either rotate or shift outward depending on whether cat food has positive or negative marginal utility. 
A)  rotate outward and its slope will change. 
B)  rotate inward and its slope will change. 
C)  shift outward and its slope will not change. 
D)  shift inward and its slope will not change. 
E)  either rotate or shift outward depending on whether cat food has positive or negative marginal utility.

Question 3

The figure above shows three of a consumer's indifference curves.
-Which of the following are true?
i.Points C and G are equally preferred because they lie on the same indifference curve.
ii.Points C and J are equally preferred because on them the consumption of chewing gum is equal.
iii.Points G and J are equally preferred because on them the consumption of water is equal.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i, ii, and iii

Question 4

-The table above has different combinations of egg rolls and sushi rolls that Richard can buy.Richard's budget for egg rolls and sushi rolls is $120 per week.What are the prices of an egg roll and a sushi roll?

Accepted Answer

If Richard spends all of his budget on e

Question 5

Bottles of Soda	Slices of Pizza
  
-The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.Suppose the price of a slice of pizza increases.As a result,Ali's

Accepted Answer

A)  marginal utility per dollar from pizza decreases. 
B)  total utility increases. 
C)  purchases of pizza might increase. 
D)  marginal utility from all the slices of pizza he consumes decreases. 
E)  marginal utility per dollar from soda increases. 
A)  marginal utility per dollar from pizza decreases. 
B)  total utility increases. 
C)  purchases of pizza might increase. 
D)  marginal utility from all the slices of pizza he consumes decreases. 
E)  marginal utility per dollar from soda increases.

Question 6

Luke enjoys eating tuna sashimi and drinking Pepsi.His consumer equilibrium occurs where his budget line

Accepted Answer

A)  just touches the lowest indifference curve at one point. 
B)  just touches the highest indifference curve at one point. 
C)  touches every indifference curve. 
D)  is below every indifference curve. 
E)  More information about Luke's budget is needed to determine his consumer equilibrium. 
A)  just touches the lowest indifference curve at one point. 
B)  just touches the highest indifference curve at one point. 
C)  touches every indifference curve. 
D)  is below every indifference curve. 
E)  More information about Luke's budget is needed to determine his consumer equilibrium.

Question 7

If you get 40 units of utility from eating the first bag of pretzels,30 from the second bag,and 20 from the third bag,the total utility of three bags of pretzels is ________ units of utility.

Accepted Answer

A)  40 
B)  70 
C)  90 
D)  50 
E)  20 
A)  40 
B)  70 
C)  90 
D)  50 
E)  20

Question 8

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 he buys ________ bottles of soda and ________ slices of pizza.

Accepted Answer

A)  4; 5 
B)  6; 4 
C)  2; 6 
D)  6; 6 
E)  None of the above answers is correct. 
A)  4; 5 
B)  6; 4 
C)  2; 6 
D)  6; 6 
E)  None of the above answers is correct.

Question 9

The figure above shows three budget lines.
-Based on the figure above,on which budget line is the relative price of gum the highest?

Accepted Answer

A)  budget line BL2 
B)  budget line BL0 
C)  budget line BL1 
D)  The relative price is the same along all three budget lines. 
E)  To answer the question, more information is needed about the consumer's income. 
A)  budget line BL2 
B)  budget line BL0 
C)  budget line BL1 
D)  The relative price is the same along all three budget lines. 
E)  To answer the question, more information is needed about the consumer's income.

Question 10

-Liz consumes two goods,candy bars and potato chips.Her budget is $4 per day.The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents.Her utility is in the table above.For Liz to maximize her utility,what combination of candy bars and potato chips should she eat?

Accepted Answer

A)  4 candy bars and 0 bags of potato chips 
B)  3 candy bars and 2 bags of potato chips 
C)  2 candy bars and 4 bags of potato chips 
D)  1 candy bar and 5 bags of potato chips 
E)  None of the above answers is correct. 
A)  4 candy bars and 0 bags of potato chips 
B)  3 candy bars and 2 bags of potato chips 
C)  2 candy bars and 4 bags of potato chips 
D)  1 candy bar and 5 bags of potato chips 
E)  None of the above answers is correct.

Question 11

As more of a good is consumed,the marginal utility of an additional unit ________,so consumers are willing to pay ________ for an additional unit.

Accepted Answer

A)  decreases; less 
B)  increases; less 
C)  decreases; more 
D)  increases; more 
E)  does not change; less 
A)  decreases; less 
B)  increases; less 
C)  decreases; more 
D)  increases; more 
E)  does not change; less

Question 12

-The figure above shows a preference map for Sarah,who likes hamburgers and milk shakes.
a.Which two combinations contain the same amount of hamburgers but different quantities of shakes?
b.Which combination(s)does Sarah most prefer? Why?
c.Which combination(s)does Sarah least prefer? Why?
d.Between which combinations is Sarah indifferent? Why?

Accepted Answer

a.Combinations a and b have the same amo

Question 13

Nadir and Nina consume the same goods.If Nadir has more income than Nina,then Nina's budget line will

Accepted Answer

A)  lie to the left of Nadir's budget line. 
B)  be steeper than Nadir's budget line. 
C)  lie to the right of Nadir's budget line. 
D)  be flatter than Nadir's budget line. 
E)  More information is needed to determine how Nina's and Nadir's budget lines compare. 
A)  lie to the left of Nadir's budget line. 
B)  be steeper than Nadir's budget line. 
C)  lie to the right of Nadir's budget line. 
D)  be flatter than Nadir's budget line. 
E)  More information is needed to determine how Nina's and Nadir's budget lines compare.

Question 14

In an indifference curve/budget line framework,how does a consumer decide which of all possible combinations of goods to purchase?

Accepted Answer

The consumer will select the combination

Question 15

The figure above shows three of a consumer's indifference curves.
-Which point is most preferred?

Accepted Answer

A)  Point C only 
B)  Point J only 
C)  Point G only 
D)  Points C and G are tied for the most preferred. 
E)  More information is needed to determine which point is most preferred. 
A)  Point C only 
B)  Point J only 
C)  Point G only 
D)  Points C and G are tied for the most preferred. 
E)  More information is needed to determine which point is most preferred.

Question 16

If a consumer obtains 20 units of utility for the first unit consumed,10 for the second,and 5 for the third,what is the total utility of consuming three units?

Accepted Answer

A)  20 units 
B)  30 units 
C)  35 units 
D)  5 units 
E)  None of the above answers is correct. 
A)  20 units 
B)  30 units 
C)  35 units 
D)  5 units 
E)  None of the above answers is correct.

Question 17

-The above table shows Homer's utility from boxes of doughnuts.If Homer decreases his consumption of doughnuts from 4 boxes to 3 boxes,his

Accepted Answer

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

Question 18

Total utility ________ as a person consumes more of one good and marginal utility ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  remains constant; decreases 
D)  fluctuates; decreases 
E)  decreases; increases 
A)  increases; increases 
B)  increases; decreases 
C)  remains constant; decreases 
D)  fluctuates; decreases 
E)  decreases; increases

Question 19

The price of coffee increases because of low crop yields.If the consumer's utility schedule for coffee remains constant,we can predict that coffee consumption

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  will stay the same. 
D)  will increase if the marginal utility of coffee diminishes and will decrease if the marginal utility of coffee increases. 
E)  might change, but we need more information to determine if it increased, decreased, or did not change. 
A)  will increase. 
B)  will decrease. 
C)  will stay the same. 
D)  will increase if the marginal utility of coffee diminishes and will decrease if the marginal utility of coffee increases. 
E)  might change, but we need more information to determine if it increased, decreased, or did not change.

Question 20

-Suppose that you consume only pizza and Diet Pepsi.The table above gives your utility from consuming these two goods.What is the marginal utility you get from the fourth slice of pizza?

Accepted Answer

A)  36 
B)  18 
C)  12 
D)  4 
E)  72 
A)  36 
B)  18 
C)  12 
D)  4 
E)  72

When Chris maximizes his total utility,then his entire available budget is allocated in such a way that the

Bobby buys cat food for his cat,Pearl.If the price of cat food falls,then Bobby's budget line will

-The table above has different combinations of egg rolls and sushi rolls that Richard can buy.Richard's budget for egg rolls and sushi rolls is $120 per week.What are the prices of an egg roll and a sushi roll?

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.Suppose the price of a slice of pizza increases.As a result,Ali's

Luke enjoys eating tuna sashimi and drinking Pepsi.His consumer equilibrium occurs where his budget line

If you get 40 units of utility from eating the first bag of pretzels,30 from the second bag,and 20 from the third bag,the total utility of three bags of pretzels is ________ units of utility.

The figure above shows three budget lines. -Based on the figure above,on which budget line is the relative price of gum the highest?

-Liz consumes two goods,candy bars and potato chips.Her budget is $4 per day.The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents.Her utility is in the table above.For Liz to maximize her utility,what combination of candy bars and potato chips should she eat?

As more of a good is consumed,the marginal utility of an additional unit ,so consumers are willing to pay for an additional unit.

Nadir and Nina consume the same goods.If Nadir has more income than Nina,then Nina's budget line will

In an indifference curve/budget line framework,how does a consumer decide which of all possible combinations of goods to purchase?

The figure above shows three of a consumer's indifference curves. -Which point is most preferred?

If a consumer obtains 20 units of utility for the first unit consumed,10 for the second,and 5 for the third,what is the total utility of consuming three units?

-The above table shows Homer's utility from boxes of doughnuts.If Homer decreases his consumption of doughnuts from 4 boxes to 3 boxes,his

Total utility as a person consumes more of one good and marginal utility .

The price of coffee increases because of low crop yields.If the consumer's utility schedule for coffee remains constant,we can predict that coffee consumption

-Suppose that you consume only pizza and Diet Pepsi.The table above gives your utility from consuming these two goods.What is the marginal utility you get from the fourth slice of pizza?

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

When Chris maximizes his total utility,then his entire available budget is allocated in such a way that the

Bobby buys cat food for his cat,Pearl.If the price of cat food falls,then Bobby's budget line will

-The table above has different combinations of egg rolls and sushi rolls that Richard can buy.Richard's budget for egg rolls and sushi rolls is $120 per week.What are the prices of an egg roll and a sushi roll?

Bottles of Soda Slices of Pizza -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.Suppose the price of a slice of pizza increases.As a result,Ali's

Luke enjoys eating tuna sashimi and drinking Pepsi.His consumer equilibrium occurs where his budget line

If you get 40 units of utility from eating the first bag of pretzels,30 from the second bag,and 20 from the third bag,the total utility of three bags of pretzels is ________ units of utility.

The figure above shows three budget lines. -Based on the figure above,on which budget line is the relative price of gum the highest?

-Liz consumes two goods,candy bars and potato chips.Her budget is $4 per day.The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents.Her utility is in the table above.For Liz to maximize her utility,what combination of candy bars and potato chips should she eat?

As more of a good is consumed,the marginal utility of an additional unit ________,so consumers are willing to pay ________ for an additional unit.

Nadir and Nina consume the same goods.If Nadir has more income than Nina,then Nina's budget line will

In an indifference curve/budget line framework,how does a consumer decide which of all possible combinations of goods to purchase?

The figure above shows three of a consumer's indifference curves. -Which point is most preferred?

If a consumer obtains 20 units of utility for the first unit consumed,10 for the second,and 5 for the third,what is the total utility of consuming three units?

-The above table shows Homer's utility from boxes of doughnuts.If Homer decreases his consumption of doughnuts from 4 boxes to 3 boxes,his

Total utility ________ as a person consumes more of one good and marginal utility ________.

The price of coffee increases because of low crop yields.If the consumer's utility schedule for coffee remains constant,we can predict that coffee consumption

-Suppose that you consume only pizza and Diet Pepsi.The table above gives your utility from consuming these two goods.What is the marginal utility you get from the fourth slice of pizza?

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

As more of a good is consumed,the marginal utility of an additional unit ,so consumers are willing to pay for an additional unit.

Total utility as a person consumes more of one good and marginal utility .