Question 1

The following table shows Ketta's total utility for coffee and croissants.
 
-Refer to Table 5.16 to answer this question.If Ketta has a budget of $15 and the price of both coffees and croissants are $3,what will be her optimal purchase?

Accepted Answer

A) 5 croissants. 
B) 1 coffee and 4 croissants. 
C) 2 coffees and 3 croissants. 
D) 3 coffees and 2 croissants. 
E) 4 coffees and 1 croissant.

Question 2

-Which of the following is a correct statement of the optimal purchasing rule?

Accepted Answer

A) MUA/MUB = PB/PA. 
B) MUA/PA = MUB/PB. 
C) PA/MUB = PB/MUA. 
D) PA/PB = MUB/MUA.

Question 3

Suppose that Jon is purchasing the optimal amounts of apples and oranges.The marginal utility of the last apple is 8 and of the last orange is 6.If the price of an apple is $1,what must be the price of an orange?

Accepted Answer

A) 50 cents. 
B) 75 cents. 
C) $1.33. 
D) $1.40. 
E) Cannot be determined from this information.

Question 4

-Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.Suppose the coach provides lessons to the children only.What is the amount of the consumer surplus of the children taking the tennis lessons?

Accepted Answer

A) $20. 
B) $50. 
C) $120. 
D) $160. 
E) Cannot be determined.

Question 5

-What is marginal utility?

Accepted Answer

A) It is the total satisfaction resulting from consuming a product. 
B) It is the total satisfaction resulting from consuming all products. 
C) It is the additional satisfaction resulting from consuming one more unit of all products. 
D) It is the additional satisfaction resulting from consuming one more unit of a product.

Question 6

Refer to Table 5.13 to answer this question.With the consumption of what quantity is marginal utility equal to zero.

Accepted Answer

A) 1. 
B) 5. 
C) 7. 
D) 8.

Question 7

-Refer to Table 5.17 to answer this question.Assume that the price of a pastry is $4 each.What are the missing numbers in the MU column for pastries?

Accepted Answer

A) 15,6.25,2.92,1.31,0.80,0.42,0. 
B) 15,25,26.25,21,20,15,0. 
C) 120,90,65,45,25,23,10. 
D) 60,50,35,21,16,10,0.

Question 8

For the following diagram,suppose the quantity traded is Q₀ and the market price is P₀,shade in the area of a)total consumer surplus. b)total expenditure. c)maximum value that consumers are willing to pay for Q₀.

Accepted Answer

The answer of For the following diagram,suppose the quantity traded...

Question 9

The following table shows Ketta's utility for eggs and bacon.
 
-Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of both eggs and bacon are $1,what will be her optimal purchase?

Accepted Answer

A) 1 egg and 7 bacon. 
B) 2 eggs and 6 bacon. 
C) 3 eggs and 5 bacon. 
D) 4 eggs and 4 bacon. 
E) 5 eggs and 3 bacon.

Question 10

"When a consumer chooses between two products,it will purchase the good that yields a higher marginal utility." Evaluate this statement.

Accepted Answer

The answer of "When a consumer chooses between two products,it...

Question 11

The following graph shows the total utility obtained from rice crackers and beer by Carla.
 
-Refer to the above graph to answer this question.If the price of rice crackers are $2,beer is $3,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?

Accepted Answer

A) 1 cracker and 4 beers. 
B) 2 crackers and 3 beers. 
C) 3 crackers and 3 beers. 
D) 4 crackers and 2 beers. 
E) 5 crackers and 1 beer.

Question 12

What is meant by the term utility?

Accepted Answer

A) A measure of a product's usefulness. 
B) A measure of necessity. 
C) The satisfaction or pleasure derived from the consumption of a product. 
D) The benefit derived from the production of a product.

Question 13

You have determined that the following utility values can be obtained by reading your Economics book.
  (a)Compute marginal utility.
(b)Does the example illustrate the principle of diminishing marginal utility? Explain.

Accepted Answer

The answer of You have determined that the following utility...

Question 14

The following table shows Erica's utility for muffins and grapefruit.
 
-Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be the total utility of her optimal purchase?

Accepted Answer

A) 56 utils. 
B) 96 utils. 
C) 145 utils. 
D) 146 utils. 
E) 331 utils.

Question 15

-Refer to the above information to answer this question.After the consumption of how many units will total utility be maximized?

Accepted Answer

A) 4. 
B) 5. 
C) 7. 
D) 8. 
E) Cannot be determined.

Question 16

The following table shows Mia's $ marginal utility for litres of soya milk:
 
-Refer to the above table to answer this question.Suppose that soya milk is free,how much will Mia consume?

Accepted Answer

A) 0. 
B) 4 litres. 
C) 5 litres. 
D) 7 litres. 
E) Cannot be determined.

Question 17

The following table shows Erica's utility for muffins and grapefruit.
 
-Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?

Accepted Answer

A) 96 utils. 
B) 116 utils. 
C) 210 utils. 
D) 331 utils. 
E) 541 utils.

Question 18

The figure below indicates Richard's demand for bus tickets.

Accepted Answer

The answer of The figure below indicates Richard's demand for...

Question 19

What is the correct expression for marginal utility?

Accepted Answer

A) TU/price. 
B) $\Delta$TU/price. 
C) $\Delta$TU/$\Delta$quantity. 
D) TU/quantity.

Question 20

The following table shows Mia's $ marginal utility for litres of soya milk:
 
-If the price of soya milk is $8 per litre,what is the maximum number of litres that Mia will buy?

Accepted Answer

A) 0. 
B) 1. 
C) 2. 
D) 3. 
E) 7.

Exam 5: Consumer Choice

The following table shows Ketta's total utility for coffee and croissants. -Refer to Table 5.16 to answer this question.If Ketta has a budget of $15 and the price of both coffees and croissants are $3,what will be her optimal purchase?

-Which of the following is a correct statement of the optimal purchasing rule?

Suppose that Jon is purchasing the optimal amounts of apples and oranges.The marginal utility of the last apple is 8 and of the last orange is 6.If the price of an apple is $1,what must be the price of an orange?

-What is marginal utility?

Refer to Table 5.13 to answer this question.With the consumption of what quantity is marginal utility equal to zero.

-Refer to Table 5.17 to answer this question.Assume that the price of a pastry is $4 each.What are the missing numbers in the MU column for pastries?

For the following diagram,suppose the quantity traded is Q0 and the market price is P0,shade in the area of a)total consumer surplus. b)total expenditure. c)maximum value that consumers are willing to pay for Q0.

The following table shows Ketta's utility for eggs and bacon. -Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of both eggs and bacon are $1,what will be her optimal purchase?

"When a consumer chooses between two products,it will purchase the good that yields a higher marginal utility." Evaluate this statement.

The following graph shows the total utility obtained from rice crackers and beer by Carla. -Refer to the above graph to answer this question.If the price of rice crackers are $2,beer is $3,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?

What is meant by the term utility?

You have determined that the following utility values can be obtained by reading your Economics book. (a)Compute marginal utility. (b)Does the example illustrate the principle of diminishing marginal utility? Explain.

The following table shows Erica's utility for muffins and grapefruit. -Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be the total utility of her optimal purchase?

-Refer to the above information to answer this question.After the consumption of how many units will total utility be maximized?

The following table shows Mia's $ marginal utility for litres of soya milk: -Refer to the above table to answer this question.Suppose that soya milk is free,how much will Mia consume?

The following table shows Erica's utility for muffins and grapefruit. -Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?

The figure below indicates Richard's demand for bus tickets.

What is the correct expression for marginal utility?

The following table shows Mia's $ marginal utility for litres of soya milk: -If the price of soya milk is $8 per litre,what is the maximum number of litres that Mia will buy?

For the following diagram,suppose the quantity traded is Q₀ and the market price is P₀,shade in the area of a)total consumer surplus. b)total expenditure. c)maximum value that consumers are willing to pay for Q₀.