Deck 8: Utility and Demand

Question 1

The first can of Sprite Jack drinks give him 22 units of utility and the second can gives him an additional 12 units of utility.How much units of utility do the two cans of Sprite give Jack?

A)17
B)46
C)34
D)2
E)36

Answer 1

34

Question 2

Use the table below to answer the following questions.
Table 8.1.1

Refer to Table 8.1.1.The value of B is

A)30.
B)47.
C)42.
D)18.
E)0.

Answer 2

47.

Question 3

A budget line is drawn with

A)quantity of one good on the vertical axis and the quantity of the second good on the horizontal axis.
B)price of one good on the vertical axis and the price of the second good on the horizontal axis.
C)quantity of one good on the vertical axis and its price on the horizontal axis.
D)quantity of one good on the horizontal axis and its price on the vertical axis.
E)quantity of one good on the horizontal axis and its total utility on the vertical axis.

Answer 3

quantity of one good on the vertical axis and the quantity of the second good on the horizontal axis.

Question 4

What is marginal utility?

A)The change in total utility divided by the price of a good.
B)The maximum amount of satisfaction from consuming a good.
C)The total satisfaction received from consuming as much of the good that is available for consumption.
D)The additional satisfaction received from consuming one more unit of a good.
E)The change in the price of a good divided by the change in total utility.

Question 5

The budget line

A)shows the limits to a household's consumption choices.
B)shows the households total utility.
C)is downward sloping because it illustrates decreasing marginal utility.
D)shows how a household's consumption choices change as income changes.
E)Both A and D are correct.

Question 6

The change in total utility that results from a one-unit increase in the quantity of a good consumed is

A)additional utility.
B)marginal utility.
C)average utility.
D)marginal utility per dollar.
E)fractional utility.

Question 7

As more of a good is consumed its

A)marginal utility increases.
B)marginal utility decreases.
C)marginal utility remains unchanged.
D)total utility decreases.
E)total utility increases at an increasing rate.

Question 8

According to the principle of diminishing marginal utility,as consumption of a good increases,total utility

A)decreases and then eventually increases.
B)decreases at an increasing rate.
C)decreases at a decreasing rate.
D)increases at an increasing rate.
E)increases at a decreasing rate.

Question 9

Use the table below to answer the following questions.
Table 8.1.1

Refer to Table 8.1.1.The value of C is

A)0.
B)13.
C)17.
D)50.
E)3.

Question 10

The fact that your fourth slice of pizza does not generate as much satisfaction as your third slice is an example of

A)consumer surplus.
B)diminishing total utility.
C)diminishing marginal utility.
D)the paradox of value.
E)the law of demand.

Question 11

Total utility equals

A)the sum of the marginal utilities of each unit consumed.
B)the area below the demand curve but above the market price.
C)the slope of the marginal utility curve.
D)the marginal utility of the last unit divided by price.
E)the marginal utility of the last unit consumed multiplied by the total number of units consumed.

Question 12

The budget line shows the boundary between those combinations of goods and services that

A)have positive marginal utility and those that have negative marginal utility.
B)are available and those that are unavailable.
C)are desirable and those that are undesirable.
D)are affordable and those that are unaffordable.
E)are normal goods and those that are inferior goods.

Question 13

Diminishing marginal utility means that

A)Ralph will enjoy his second hamburger less than the first one.
B)the utility from one hamburger is greater than the utility from two hamburgers.
C)the price of two hamburgers is less than twice the price of one.
D)the utility from eating two hamburgers will be more than twice the utility from eating the first one.
E)hamburgers seem smaller as you eat more of them.

Question 14

John likes to eat apples,oranges,and pears.If John increases his consumption of oranges,ceteris paribus,marginal utility theory tell us that John's marginal utility of

A)oranges decreases.
B)apples decreases.
C)pears decreases.
D)oranges remains constant.
E)oranges, apples, and pears all decrease.

Question 15

Total utility is always

A)greater than marginal utility.
B)less than marginal utility.
C)decreasing when marginal utility is decreasing.
D)decreasing when marginal utility is increasing.
E)increasing when marginal utility is positive.

Question 16

When total utility is increasing,marginal utility

A)is negative.
B)must be between zero and one.
C)is either increasing or decreasing.
D)is either positive or negative.
E)is also increasing.

Question 17

Utility is

A)the value of a good.
B)the additional satisfaction received from consuming another unit of a good.
C)the benefit or satisfaction from consuming goods and services.
D)the practical usefulness of a good.
E)equal to the price of a good.

Question 18

Marginal utility equals

A)total utility divided by price.
B)total utility divided by the total number of units consumed.
C)the slope of the total utility curve.
D)the inverse of total utility.
E)the area below the demand curve but above market price.

Question 19

Use the table below to answer the following question.
Table 8.1.2

Table 8.1.2 gives total utilities for Jim and Sally.Which one of the following statements is true?

A)Jim has increasing marginal utility.
B)For Sally, the marginal utility of the third unit consumed is 6.
C)If Jim consumes 2 units, his total utility is 34 units.
D)Jim and Sally receive the same marginal utility from the third unit consumed.
E)If Sally consumes 2 units, her total utility is 10 units.

Question 20

The first can of Coke gives 15 units of utility to Witney,while the second can of Coke increases her total utility to 23.What is the marginal utility of the second can of Coke?

A)24 units
B)8 units
C)38 units
D)11.5 units
E)7.5 units

Question 21

Suppose a consumer spends all his income.His marginal utility per dollar on X is 4 and marginal utility per dollar on Y is 2.We know that

A)utility can be increased by increasing the consumption of X and decreasing the consumption of Y.
B)utility can be increased by decreasing the consumption of X and increasing the consumption of Y.
C)the price of Y must be eight times the price of X.
D)utility is maximized.
E)the price of Y must be one-third the price of X.

Question 22

Use the table below to answer the following questions.
Table 8.2.1

Refer to Table 8.2.1.Consider Sam's utility from sailing and skiing.If the price of sailing is $10 per hour and the price of skiing is $20 per hour,Sam will choose to spend

A)all his time sailing.
B)all his time skiing.
C)more time sailing than skiing.
D)more time skiing than sailing.
E)the same amount of time sailing and skiing, since they give the same amount of utility.

Question 23

Sam buys gasoline and coffee each week.To draw his budget line for gasoline and coffee,Sam needs to know

A)if his income is expected to rise in the future.
B)if the price of gasoline is expected to rise in the future.
C)if the price of coffee is expected to fall in the future.
D)the goods that he considers to be substitutes for gasoline and for coffee.
E)how much income he has to spend and the prices of one litre of gasoline and one cup of coffee.

Question 24

If a consumer spends all his income and his marginal utility per dollar is equal for all goods,then

A)marginal utility is maximized.
B)total utility is maximized.
C)he cannot be better off even with more income.
D)the proportion of income spent on each good must be equal.
E)the number of units bought of each good must be equal.

Question 25

In consumer equilibrium

A)total utility is maximized given the consumer's income and the prices of goods.
B)marginal utility is maximized given the consumer's income and the prices of goods.
C)marginal utility per dollar is maximized given the consumer's income and the prices of goods.
D)the marginal utility from each good is equal.
E)marginal utility per dollar is zero.

Question 26

According to the marginal utility theory,consumers

A)maximize utility and minimize marginal utility.
B)maximize utility and equalize marginal utility per dollar across all goods.
C)save part of their income for future consumption.
D)maximize utility by spending the most on the least expensive good.
E)maximize utility by spending the least on the least expensive good.

Question 27

Let MUA and MUB stand for the marginal utility of goods A and B,respectively.Let PA and PB stand for the price of goods A and B,respectively.Assume that for a given consumer MUA and MUB are equal to each other,and PA is greater than PB.In this case,the consumer is better off if he consumes

A)more of good A and less of good B.
B)less of good A and more of good B.
C)equal amount of goods A and B.
D)good B only.
E)neither good A nor good B.

Question 28

Harold can consume either pens or milkshakes.The price of a pen is $1,and the price of a milkshake is $1.Harold figures that when his income is spent,his marginal utility from pens will be 10 and his marginal utility from milkshakes will be 8.Harold is better off

A)by consuming more pens and fewer milkshakes.
B)by consuming more pens and more milkshakes.
C)by consuming fewer pens and fewer milkshakes.
D)by consuming fewer pens and more milkshakes.
E)only if he makes more income.

Question 29

Samir consumes apples and bananas and is in consumer equilibrium.The marginal utility from his last apple is 10 and the marginal utility from his last banana is 5.If the price of an apple is $0.50,then what is the price of a banana?

A)$0.05
B)$0.10
C)$0.25
D)$0.50
E)$1.00

Question 30

Use the table below to answer the following questions.
Table 8.2.2

Refer to Table 8.2.2.What is the total utility if 3 bags of popcorn and 2 bottles of pop are consumed?

A)150
B)310
C)490
D)660
E)100.

Question 31

Advise Sarah how to maximize her utility if MUA??,MUB???,PA?? and PB??.

A)Consume equal amounts of both goods.
B)Consume more of good A and less of good B.
C)Consume more of good B and less of good A.
D)Lower the price of good B.
E)Raise the price of good A.

Question 32

Which one of the following is not true in consumer equilibrium?

A)The total utilities of all goods are equal.
B)The consumer is maximizing utility, given her income and the prices of goods and services.
C)The marginal utility per dollar is equal for all goods.
D)Given prices and her income, the consumer finds that any other choice of goods to consume would lower her utility.
E)The consumer will not change her choices unless prices or income change.

Question 33

Use the table below to answer the following questions.
Table 8.2.1

Refer to Table 8.2.1.Consider Sam's utility from sailing and skiing.The price of sailing is $10 per hour and the price of skiing is $20 per hour;Sam's income to spend on these activities is $80.In consumer equilibrium,Sam will sail for

A)3 hours and ski for 2 hours.
B)2 hours and ski for 4 hours.
C)4 hours.
D)4 hours and ski for 2 hours.
E)8 hours.

Question 34

Use the table below to answer the following questions.
Table 8.2.3

Refer to Table 8.2.3.To attain consumer equilibrium,the first $4 of income is used to purchase

A)2 units of good X.
B)3 units of good X.
C)4 units of good Y.
D)an amount of X and Y that cannot be determined from the table.
E)2 units of good Y and 1 unit of X.

Question 35

Use the table below to answer the following questions.
Table 8.2.3

Refer to Table 8.2.3.If income is $13,then utility is maximized when consumption is

A)6 units of X and 1 unit of Y.
B)5 units of X and 3 units of Y.
C)4 units of X and 5 units of Y.
D)3 units of X and 7 units of Y.
E)2 units of X and 9 units of Y.

Question 36

Use the table below to answer the following questions.
Table 8.2.2

Refer to Table 8.2.2.Henry is maximizing his utility by consuming 3 bags of popcorn and 3 bottles of pop.What is the ratio of the price of popcorn to the price of pop?

A)1/2
B)1
C)3/4
D)4/3
E)6/5

Question 37

To determine consumer equilibrium we need to know only

A)prices and income.
B)total utility and income.
C)marginal utility and income.
D)prices, income, and marginal utility.
E)prices and marginal utility.

Question 38

Sarah can consume either pizzas or hamburgers.The price of a hamburger is $1 and the price of a pizza is $5.Let MUh be the marginal utility of hamburgers and MUp be the marginal utility of pizzas.In consumer equilibrium,what must the ratio MUh/MUp equal?

A)1/5
B)5/1
C)1/1
D)1/6
E)4

Question 39

Let MUA and MUB stand for the marginal utility of goods A and B,respectively.Let PA and PB stand for the price of goods A and B,respectively.Which statement must hold for consumer equilibrium?

A)MUA = MUB
B)MUA = MUB and PA = PB
C)MUA/MUB = PB/PA
D)MUA/MUB = PA/PB
E)MUAPA = MUBPB

Question 40

For a consumer to maximize utility from a given income,

A)the marginal utility from each good must be maximized.
B)the total utility from each good must be maximized.
C)the marginal utilities of all goods and services consumed must be equal.
D)the marginal utility per dollar from all goods and services consumed must be equal.
E)the amount of each good consumed per dollar must be equal.

Question 41

Use the table below to answer the following question.
Table 8.2.4

Refer to Table 8.2.4.Suppose the price of X is $1 and the price of Y is $1.How much of each should you purchase to maximize utility from a total expenditure of $11?

A)3 units of X and 8 units of Y
B)4 units of X and 7 units of Y
C)5 units of X and 6 units of Y
D)6 units of X and 5 units of Y
E)7 units of X and 4 units of Y

Question 42

Billy likes candy bars and popcorn.Candy bars sell for $0.50 each and popcorn sells for $1 a bag.Currently he is in consumer equilibrium with marginal utility per dollar on popcorn equal to 100.What is the marginal utility per dollar on candy bars?

A)50
B)100
C)200
D)25
E)0.5

Question 43

If Katie purchases two slices of pizza and six breadsticks to maximize her total utility,then

A)a slice of pizza costs three times as much as a breadstick.
B)her marginal utility from the second slice of pizza divided by the price of a slice of pizza is equal to her marginal utility from the sixth breadstick divided by the price of a breadstick.
C)a breadstick costs three times as much as a slice of pizza.
D)she spends more on pizza than she spends on breadsticks.
E)B and D are both correct.

Question 44

Martha and Sarah have the same preferences,face the same prices,and have the same income.Sarah's utility is measured in units while Martha's is measured in units squared.Select the best response.

A)Martha and Sarah will choose to consume the same set of goods.
B)Martha's and Sarah's marginal utility per dollar will be equal.
C)Martha's and Sarah's marginal utilities will be equal.
D)Martha and Sarah will have equal total utility.
E)Martha and Sarah will not choose to consume the same set of goods.

Question 45

Suppose you are consuming hot dogs and Cokes and believe you are receiving maximum total utility from the meal for your entire budget of $12.The price of a hot dog is $2 and the price of a Coke is $2.Which one of the following can you conclude?

A)The total utility from hot dogs is maximized.
B)The marginal utilities from hot dogs and Cokes divided by the quantity of each good must be equal.
C)The total utilities from hot dogs and Cokes must be equal.
D)You are purchasing three hot dogs and three Cokes.
E)The marginal utilities from hot dogs and Cokes must be equal.

Question 46

If Ms.Petersen is maximizing her utility in the consumption of goods A and B,which one of the following statements must be true?

A)MUA = MUB
B)MUA/PA = MUB/PB
C)MUA/PB = MUB/PA
D)TUA = TUB
E)TUA/PA = TUB/PB

Question 47

Sergio is maximizing utility in his consumption of beer and bubblegum.If the price of beer is greater than the price of bubblegum,then we know

A)Sergio buys more beer than bubblegum.
B)Sergio buys more bubblegum than beer.
C)the marginal utility from the last purchased beer is greater than the marginal utility from the last purchased bubblegum.
D)the marginal utility from the last purchased bubblegum is greater than the marginal utility from the last purchased beer.
E)the marginal utilities from the last purchased beer and bubblegum are equal.

Question 48

The relative price of beer to back bacon is 2:1.If Bob's current consumption is at a level where
MUb???/MUb?ck b?c?n is 1:2,then to maximize total utility Bob must

A)consume more beer and less back bacon.
B)not change his current consumption of beer and back bacon.
C)consume less beer and more back bacon.
D)raise the price of beer.
E)consume twice as much beer and half as much back bacon.

Question 49

When Kathryn is at her consumer equilibrium,she is

A)consuming the combination of goods that is at the midpoint of her budget line.
B)consuming a combination of goods that is located inside her budget line.
C)consuming a combination of goods that is located outside her budget line.
D)consuming a combination such that the marginal utility from good X divided by the marginal utility from good Y equals the price of good X divided by the price of good Y.
E)on the midpoint of her demand curve.

Question 50

Which one of the following is not an assumption of marginal utility theory?

A)People derive utility from their consumption.
B)More consumption yields more total utility.
C)Utility can be measured.
D)Marginal utility diminishes with more consumption.
E)Consumers maximize total utility.

Question 51

Max has $35 a day to spend,and he can spend as much time as he likes on his leisure pursuits.Windsurfing equipment rents for $10 an hour,and snorkeling equipment rents for $5 an hour.If Max equalizes the marginal utility per hour from windsurfing and from snorkeling,he

A)maximizes his total utility.
B)can increase his total utility by spending less time windsurfing and more time snorkeling.
C)can increase his total utility only if the price of windsurfing equipment rentals decreases.
D)can increase his total utility by spending more time windsurfing and less time snorkeling.
E)maximizes his marginal utility per dollar.

Question 52

Use the table below to answer the following question.
Table 8.2.5

Refer to Table 8.2.5.Cindy enjoys golf and tennis.The table shows the marginal utility she gets from each activity.
Cindy has $70 a month to spend,and she can spend as much time as she likes on her leisure pursuits.The price of an hour of golf is $10,and the price of an hour of tennis is $5.
Cindy decides to golf for 5 hours a month and play tennis for 4 hours a month.
If Cindy spends a dollar more on golf and a dollar less on tennis,her total utility ________.
If Cindy spends a dollar less on golf and a dollar more on tennis,her total utility ________.

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

Question 53

In consumer equilibrium,a consumer equates the

A)total utility from each good.
B)marginal utility from each good.
C)total utility per dollar on each good.
D)marginal utility per dollar on each good.
E)total income spent on each good with total utility from each good.

Question 54

If Soula is maximizing her utility,and two goods have the same marginal utility,she

A)buys only one.
B)buys equal quantities of both.
C)is paying the same price for each good.
D)receives the same total utility from each good.
E)none of the above.

Question 55

If the marginal utilities from two goods are not equal,then the consumer

A)cannot be in equilibrium.
B)should increase consumption of the good with the lower marginal utility.
C)should decrease consumption of the good with the lower marginal utility.
D)may possibly be in equilibrium.
E)will definitely be in equilibrium.

Question 56

John and Sally have identical preferences except Sally's utility units are exactly 10 times that of John's.Both have the same income and face the same prices.Choose the best response.

A)John consumes 10 times the amount that Sally consumes.
B)John receives 1/10 the satisfaction that Sally receives.
C)Both will consume the same amount of all goods.
D)John and Sally will have equal total utility.
E)John and Sally will have equal marginal utility.

Question 57

Danny has $12 to spend on two goods: pies and pop.The price of a pie is $4,and the price of a can of pop is $2.To maximize his utility,Danny buys

A)2 pies and 2 cans of pop.
B)3 pies and no pop.
C)the combination that gives him the same marginal utility per dollar on pies as on pop.
D)6 cans of pop and no pie.
E)the combination that gives him the same total utility from pies as from pop.

Question 58

Shelley is maximizing utility in her consumption of mansions and Porsches.If the marginal utility of her last purchased mansion is twice the marginal utility of her last purchased Porsche,then we know

A)Shelley buys twice as many mansions as Porsches.
B)Shelley buys twice as many Porsches as mansions.
C)Shelley buys more Porsches than mansions, but we do not know how many more.
D)the price of a mansion is twice the price of a Porsche.
E)the price of a Porsche is twice the price of a mansion.

Question 59

A consumer maximizes his utility by purchasing 2 units of good X at $5 per unit and 3 units of good Y at $7 per unit.What is the ratio of the marginal utility from X to the marginal utility from Y?

A)5/7
B)7/5
C)2/3
D)3/2
E)10/21

Question 60

Geneva is not at her consumer equilibrium for movies and music downloads.Why?

A)Her average utility from movies does not equal her average utility from music downloads.
B)Her total utility from movies does not equal her total utility from music downloads.
C)Her marginal utility from the last movie she attended does not equal her marginal utility from the last music download she downloaded.
D)Her average utility from movies does not equal her total utility from music downloads.
E)Her marginal utility per dollar from the last movie she attended does not equal her marginal utility per dollar from the last music download she downloaded.

Question 61

If income falls,then in the new consumer equilibrium

A)the marginal utility from normal goods increases.
B)the marginal utility from normal goods decreases.
C)the marginal utility from inferior goods increases.
D)total utility from normal goods increases.
E)both B and C.

Question 62

Ron starts out in consumer equilibrium,consuming two goods,X and Y.The price of Y rises.Immediately after the rise in price

A)MUX/PX > MUY/PY, and then Ron increases his consumption of Y.
B)MUX/PX > MUY/PY, and then Ron decreases his consumption of Y.
C)MUX/PX < MUY/PY, and then Ron increases his consumption of Y.
D)MUX/PX < MUY/PY, and then Ron decreases his consumption of Y.
E)none of the above.

Question 63

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour, snorkeling equipment for $5 per hour.

Consider Devon's total utility from snorkeling and windsurfing in Table 8.2.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,what is Devon's cross elasticity of demand of snorkeling with respect to the price of windsurfing?

A)1.0
B)0.67
C)1.5
D)10
E)1.33

Question 64

If the price of a good rises,then in the new consumer equilibrium all of the following are true except

A)the marginal utility from consuming the good will be higher than before the price rise.
B)the quantity of the good consumed decreases.
C)the quantity of substitutes consumed increases.
D)the marginal utility from substitutes will be lower than before the price rise.
E)the marginal utility from the good equals its new higher price.

Question 65

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour, snorkeling equipment for $5 per hour.

Consider Devon's utility from snorkeling and windsurfing in Table 8.2.1.Devon has $55 to spend.What are Devon's choices for time spent on the two activities?

A)1 hour of windsurfing and 9 hours of snorkeling
B)2 hours of windsurfing and 7 hours of snorkeling
C)3 hours of windsurfing and 5 hours of snorkeling
D)4 hours of windsurfing and 3 hours of snorkeling
E)5 hours of windsurfing and 1 hour of snorkeling

Question 66

If income rises,then in the new consumer equilibrium

A)the marginal utility from normal goods increases.
B)the marginal utility from normal goods decreases.
C)the marginal utility from inferior goods increases.
D)total utility from inferior goods increases.
E)both B and C.

Question 67

Bikes and roller blades are substitutes.Marginal utility theory predicts that when the price of a bike rises,the quantity of bikes demanded

A)decreases and the demand curve for roller blades shifts rightward.
B)decreases and the demand curve for roller blades shifts leftward.
C)decreases and a movement occurs down along the demand curve for roller blades.
D)increases and the demand curve for roller blades shifts rightward.
E)increases and the demand curve for roller blades shifts leftward.

Question 68

As a consumer's income decreases,marginal utility theory predicts that

A)the price of normal goods falls.
B)the demand for normal goods decreases.
C)the demand for all goods decreases.
D)the demand for normal goods increases.
E)total utility increases.

Question 69

Chuck and Barry have identical total utility schedules but Chuck has a much higher income.If each is maximizing his total utility,then

A)they will have equal total utilities.
B)Chuck will have lower total utility than Barry.
C)Chuck will have lower marginal utility than Barry for each normal good consumed.
D)Chuck will have higher marginal utility than Barry for each normal good consumed.
E)they will have equal marginal utilities for each normal good consumed.

Question 70

Utility is similar to temperature because

A)both are positive.
B)both are negative.
C)both have units of measurement that are arbitrary.
D)both are observable.
E)both are measured in the same scale.

Question 71

Ron starts out in consumer equilibrium,consuming two goods,X and Y.The price of X rises.Immediately after the rise in price

A)MUX/PX > MUY/PY, and then Ron increases his consumption of X.
B)MUX/PX > MUY/PY, and then Ron decreases his consumption of X.
C)MUX/PX < MUY/PY, and then Ron increases his consumption of X.
D)MUX/PX < MUY/PY, and then Ron decreases his consumption of X.
E)none of the above.

Question 72

Ron starts out in consumer equilibrium,consuming two goods,X and Y.Ron's income rises.At this point,we can definitely conclude that

A)MUX/PX > MUY/PY, and then Ron increases his consumption of X.
B)MUX/PX > MUY/PY, and then Ron decreases his consumption of X.
C)MUX/PX < MUY/PY, and then Ron increases his consumption of X.
D)MUX/PX < MUY/PY, and then Ron decreases his consumption of X.
E)none of the above.

Question 73

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour, snorkeling equipment for $5 per hour.

Consider Devon's total utility from snorkeling and windsurfing in Table 8.2.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,how long does Devon choose to windsurf and to snorkel?

A)1 hour of windsurfing and 3 hours of snorkeling
B)2 hour of windsurfing and 7 hours of snorkeling
C)3 hours of windsurfing and 5 hours of snorkeling
D)4 hours of windsurfing and 3 hours of snorkeling
E)5 hours of windsurfing and 1 hour of snorkeling

Question 74

Beverly is currently in consumer equilibrium.An increase in her income

A)increases her total utility.
B)decreases her total utility.
C)increases her marginal utility from all goods.
D)decreases her marginal utility from all goods.
E)increases her consumption of all goods.

Question 75

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour, snorkeling equipment for $5 per hour.

Consider Devon's total utility from snorkeling and windsurfing in Table 8.2.1.Suppose Devon's total income is $35.If the price of windsurfing rises to $20 per hour,what is Devon's elasticity of demand for windsurfing?

A)1.0
B)0.67
C)1.5
D)10
E)1.33

Question 76

Billy likes candy bars and popcorn.Candy bars sell for $0.50 each and popcorn sells for $1 per bag.Currently he is in consumer equilibrium.Then the price of a candy bar rises to $1.Which statement is true in the new consumer equilibrium?

A)The marginal utility from popcorn will increase.
B)Marginal utility per dollar on candy bars will be equal to 2.
C)Total utility will increase.
D)The marginal utility from candy will decrease.
E)The marginal utility from candy will be equal to the marginal utility from popcorn.

Question 77

Harold can consume apples and oranges.He likes them equally well and currently is in consumer equilibrium.Then the price of oranges rises,while his income remains the same.What will happen to his consumption?

A)consumption of oranges increases;consumption of apples decreases
B)consumption of oranges increases;consumption of apples increases
C)consumption of oranges decreases;consumption of apples decreases
D)consumption of oranges decreases;consumption of apples increases
E)consumption of oranges decreases;consumption of apples could either increase or decrease

Question 78

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour, snorkeling equipment for $5 per hour.

Consider Devon's total utility from snorkeling and windsurfing in Table 8.2.1.Suppose that Devon's total income rises from $35 to $55,ceteris paribus.Given that Devon changes his choice of windsurfing and snorkeling,what is his income elasticity for windsurfing?

A)zero
B)28.6
C)44.4
D)0.64
E)1.55

Question 79

Use the table below to answer the following questions.
Table 8.2.1
Windsurfing equipment rents for $10 per hour, snorkeling equipment for $5 per hour.

Devon enjoys windsurfing and snorkeling.His total utility from each activity is summarized in Table 8.2.1.Devon has $35 to spend.How long will Devon choose to windsurf and to snorkel?

A)1 hour windsurfing and 5 hours snorkeling
B)2 hours windsurfing and 3 hours snorkeling
C)3 hours windsurfing and 1 hour snorkeling
D)4 hours windsurfing and no hours snorkeling
E)2 hour windsurfing and 4 hours snorkeling

Question 80

If the price of a good falls,then in the new consumer equilibrium

A)the marginal utility from consuming the good will be higher than before.
B)the quantity of the good consumed decreases.
C)the quantity of substitutes consumed increases.
D)the marginal utility from substitutes will be lower than before the fall in price.
E)none of the above.