Quiz 10: The Rational Consumer
Business
Q 1Q 1
The relation between an individual's consumption bundle and her satisfaction is called a _____ function.
A)demand
B)production
C)consumption
D)utility
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Multiple Choice
D
Q 2Q 2
To say that you can't have too much of a good thing means that,for any good that you enjoy (for example,pizza):
A)higher consumption will always lead to higher utility.
B)higher consumption will cause utility to decrease at an increasing rate.
C)higher consumption will increase utility,but only up to a point;after that,utility will start to decrease.
D)it is valid to measure utility in utils.
Free
Multiple Choice
A
Q 3Q 3
Economists identify the satisfaction a person derives from the consumption of goods and services as:
A)happiness.
B)usefulness.
C)utility.
D)pleasure.
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Multiple Choice
C
Q 4Q 4
The utility of a good is determined by how much _____ a particular consumer obtains from it.
A)satisfaction
B)usefulness
C)cost
D)need fulfillment
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Multiple Choice
Q 5Q 5
Economists describe the satisfaction consumers receive from consuming goods and services as:
A)utility.
B)income effects.
C)budget constraints.
D)substitution effects.
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Multiple Choice
Q 6Q 6
Utility is the:
A)difference between a firm's total revenue and its total economic cost.
B)good not adequately provided by a free market and usually provided by the government.
C)satisfaction consumers derive from their consumption of goods and services.
D)lowest price that buyers are willing to pay for a given quantity of a good.
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Multiple Choice
Q 7Q 7
For economists,the satisfaction an individual derives from the consumption of goods and services is BEST described as:
A)happiness.
B)usefulness.
C)utility.
D)opportunity cost.
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Multiple Choice
Q 8Q 8
In economics,the ability of pumpkin pie to satisfy a want is referred to as its:
A)utility.
B)usefulness.
C)worthiness.
D)necessity.
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Multiple Choice
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Q 10Q 10
How much _____ Susan obtains from eating green beans is a measure of the utility of green beans for her.
A)efficiency
B)usefulness
C)cost
D)satisfaction
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Multiple Choice
Q 11Q 11
Which good is MOST likely to display increasing marginal utility over some range?
A)chicken during the 1920s,when it was considered a luxury good
B)paint,because you need enough to paint at least one entire room
C)lobsters,which are so expensive that you must eat two to get your money's worth
D)peanut butter and jelly sandwiches
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Multiple Choice
Q 12Q 12
The marginal utility of coffee consumption for Steve is the change in _____ generated by consuming an additional cup of coffee.
A)total utility
B)total consumption
C)total demand
D)price
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Multiple Choice
Q 13Q 13
On a sparsely populated island,an additional minute of high-speed Internet service would have a _____ marginal utility than in New York City,while in New York City,quiet evenings would carry a _____ marginal utility than on a deserted island.
A)lower;higher
B)higher;lower
C)lower;lower
D)higher;higher
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Multiple Choice
Q 14Q 14
Suppose bad weather and pollution dramatically reduce the supply of crawfish in Louisiana next year.This would MOST likely lead to _____ in the marginal utility of crawfish consumption.
A)an increase
B)a decrease
C)no change
D)substitution and income effects
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Multiple Choice
Q 15Q 15
An individual gets 5 units of utility from one slice of pizza and 9 units of utility from two slices of pizza.The principle of diminishing marginal utility implies that the total utility from three slices of pizza will be _____ units of utility.
A)exactly 12
B)less than 13
C)less than 9
D)more than 14
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Multiple Choice
Q 16Q 16
Which statement BEST describes the principle of diminishing marginal utility? As an individual consumes more of a good:
A)the total utility obtained will eventually fall.
B)the total utility obtained will eventually become negative.
C)the addition to total utility obtained from the nth unit of the good will be less than that obtained from the immediately preceding unit of the good.
D)the marginal utility will eventually become negative.
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Multiple Choice
Q 17Q 17
The principle of diminishing marginal utility means that,when Sarah eats pizza,her satisfaction from the second slice of pizza is probably _____ that from the first.
A)greater than
B)equal to
C)less than
D)not comparable to
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Multiple Choice
Q 18Q 18
The amount by which total utility changes when an additional unit of a good is consumed is called _____ utility.
A)average
B)additional
C)maximum
D)marginal
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Multiple Choice
Q 19Q 19
The amount by which an additional unit of a good or service changes a consumer's total satisfaction,all other things unchanged,is _____ utility.
A)marginal
B)maximum
C)average
D)expected
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Multiple Choice
Q 20Q 20
The law of diminishing marginal utility indicates that the slope of the marginal utility curve is generally:
A)negative.
B)vertical.
C)horizontal.
D)positive.
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Multiple Choice
Q 21Q 21
The principle of diminishing marginal utility:
A)refers to the tendency of total utility to increase until an individual's budget is no longer constrained.
B)refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases.
C)indicates that,if a good is inferior,less of it will be purchased when income falls.
D)assumes all goods are normal.
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Multiple Choice
Q 22Q 22
Which statement is TRUE if the principle of diminishing marginal utility applies?
A)When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives the same marginal utility.
B)When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives less marginal utility.
C)When a customer at the Pie Palace continues to eat more pie,each additional piece of pie lowers total utility.
D)The total utility of pie is at a maximum,while the marginal utility of pie is still increasing.
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Multiple Choice
Q 23Q 23
If total utility is rising as more salsa is consumed,we can definitely say that marginal utility is:
A)falling.
B)constant.
C)rising.
D)greater than zero.
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Multiple Choice
Q 24Q 24
Freddy has eaten three corn dogs at the county fair,and if he eats another,he will get sick on the roller coaster.Knowing this,and ignoring any impact that price might have on his decision,we can say that,for the fourth corn dog,the:
A)total utility is less than zero.
B)marginal utility is less than zero.
C)total utility curve is still increasing.
D)marginal utility curve is still increasing.
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Multiple Choice
Q 25Q 25
Use the following to answer questions 36-37:
-(Table: Exercise and Total Utility)Use Table: Exercise and Total Utility.Marginal utility:
A)initially decreases but eventually increases as more exercise is consumed.
B)always decreases as more exercise is consumed.
C)initially increases but eventually decreases as more exercise is consumed.
D)initially increases but eventually stays constant as more exercise is consumed.
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Multiple Choice
Q 26Q 26
Use the following to answer questions 36-37:
-(Table: Exercise and Total Utility)Use Table: Exercise and Total Utility.The principle of diminishing marginal utility is seen:
A)nowhere,as marginal utility is always increasing.
B)immediately,from the first hour and beyond.
C)between the third and fourth hours.
D)after the second hour of exercise.
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Multiple Choice
Q 27Q 27
When an individual continues to eat more turkey,if the principle of diminishing marginal utility applies,each additional serving yields:
A)more marginal utility.
B)less marginal utility.
C)the same amount of marginal utility.
D)less total utility.
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Multiple Choice
Q 28Q 28
If total utility is at a maximum,marginal utility is:
A)rising.
B)at its average value.
C)at a maximum.
D)zero.
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Multiple Choice
Q 29Q 29
The amount by which total utility rises when an additional slice of pie is consumed is called:
A)average utility.
B)the law of diminishing returns.
C)incremental utility.
D)marginal utility.
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Multiple Choice
Q 30Q 30
As you consume more turkey relative to mashed potatoes,the _____ of turkey eventually decreases.
A)price
B)usefulness
C)marginal utility
D)demand
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Multiple Choice
Q 31Q 31
The amount by which total utility _____ when an additional unit of a good is consumed is _____.
A)changes;average utility
B)increases;the income effect
C)decreases;maximum utility
D)changes;marginal utility
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Multiple Choice
Q 32Q 32
Use the following to answer questions 43-48:
-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the second serving she eats is _____ units.
A)35
B)15
C)10
D)5
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Multiple Choice
Q 33Q 33
Use the following to answer questions 43-48:
-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the fifth serving she eats is _____ units.
A)15
B)10
C)5
D)0
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Multiple Choice
Q 34Q 34
Use the following to answer questions 43-48:
-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the sixth serving she eats is _____ units.
A)-25
B)0
C)25
D)-15
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Multiple Choice
Q 35Q 35
Use the following to answer questions 43-48:
-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.Carmen's total utility is maximized after she eats the _____ serving.
A)first
B)second
C)forth
D)sixth
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Multiple Choice
Q 36Q 36
Use the following to answer questions 43-48:
-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.Carmen's marginal utility from eating macaroni and cheese is 0 for the _____ serving.
A)first
B)second
C)third
D)fifth
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Multiple Choice
Q 37Q 37
Use the following to answer questions 43-48:
-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.Carmen's marginal utility from eating macaroni becomes negative at the _____ serving.
A)first
B)second
C)fifth
D)sixth
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Multiple Choice
Q 38Q 38
The marginal utility of eating sweet potatoes is the:
A)change in total utility from consuming an additional serving.
B)total utility divided by the number of servings consumed.
C)change in total utility divided by the number of servings consumed.
D)total utility divided by the change in the number of servings consumed.
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Multiple Choice
Q 39Q 39
Assuming that diminishing marginal utility applies to both pomegranates and bananas,if Vanessa buys more pomegranates and fewer bananas,the _____ utility of pomegranates will _____,and the _____ utility of bananas will _____.
A)marginal;fall;marginal;rise
B)marginal;rise;marginal;fall
C)total;fall;marginal;rise
D)marginal;rise;total;rise
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Multiple Choice
Q 40Q 40
Assuming that diminishing marginal utility applies to both goods,if a consumer buys more plastic bins and fewer door hooks,the _____ utility of plastic bins will _____,and the _____ utility of door hooks will _____.
A)marginal;fall;marginal;rise
B)marginal;fall;marginal;fall
C)total;fall;marginal;rise
D)marginal;rise;total;rise
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Multiple Choice
Q 41Q 41
Abdul spends all of his income on food (F)and shelter (S).His budget line is given by the equation 5F + 20S = 100.Which consumption bundle is part of his consumption possibilities?
A)8 units of F and 3 units of S
B)14 units of F and 2 units of S
C)0 units of F and 6 units of S
D)20 units of F and 15 units of S
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Multiple Choice
Q 42Q 42
Use the following to answer questions 53-57:
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone is $1.Which chart shows what will happen to her budget line if her income increases to $25?
A)A
B)B
C)C
D)D
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Multiple Choice
Q 43Q 43
Use the following to answer questions 53-57:
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if her income decreases to $10?
A)A
B)B
C)C
D)D
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Multiple Choice
Q 44Q 44
Use the following to answer questions 53-57:
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of a cup of tea falls to $0.50?
A)A
B)B
C)C
D)D
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Multiple Choice
Q 45Q 45
Use the following to answer questions 53-57:
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of a scone rises to $2?
A)A
B)B
C)C
D)D
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Multiple Choice
Q 46Q 46
Use the following to answer questions 53-57:
-(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of both a cup of tea and a scone increase to $2?
A)A
B)B
C)C
D)D
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Multiple Choice
Q 47Q 47
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.The horizontal intercept for Faruq's budget line is _____ tacos.
A)50
B)10
C)5
D)100
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Multiple Choice
Q 48Q 48
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.The slope of Faruq's budget line is equal to:
A)-1/5.
B)-5.
C)1/5.
D)5.
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Multiple Choice
Q 49Q 49
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.If Faruq spends all of his income,the opportunity cost of one taco equals _____ milkshakes.
A)2
B)10
C)5
D)1/5
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Multiple Choice
Q 50Q 50
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If Faruq purchases 10 milkshakes,he can purchase _____ tacos.
A)10
B)50
C)8
D)18
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Multiple Choice
Q 51Q 51
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If Faruq spends all of his income,the opportunity cost of one milkshake is equal to _____ tacos.
A)2
B)10
C)5
D)1/5
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Multiple Choice
Q 52Q 52
Chuck spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If the price of each good doubles and Chuck's income doubles:
A)Chuck's budget line will be unaffected.
B)Chuck's budget line will shift out.
C)Chuck's budget line will shift in.
D)Chuck will be able to buy more of both goods.
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Multiple Choice
Q 53Q 53
Chuck spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.The vertical intercept for Chuck's budget line is _____ milkshakes.
A)50
B)10
C)5
D)100
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Multiple Choice
Q 54Q 54
Joe's budget line reflects the _____ available to Joe if he spends _____ of his income.
A)consumption bundles;all
B)consumption bundles;part
C)utility;all
D)utility;part
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Multiple Choice
Q 55Q 55
Use the following to answer questions 66-71:
-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of clams would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.
A)increase;horizontal;toward
B)decrease;horizontal;toward
C)increase;vertical;toward
D)decrease;vertical;away from
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Multiple Choice
Q 56Q 56
Use the following to answer questions 66-71:
-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of potatoes would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.
A)increase;horizontal;away from
B)decrease;horizontal;toward
C)increase;vertical;toward
D)decrease;vertical;toward
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Multiple Choice
Q 57Q 57
Use the following to answer questions 66-71:
-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of clams would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.
A)increase;horizontal;away from
B)decrease;horizontal;away from
C)increase;vertical;toward
D)decrease;vertical;away from
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Multiple Choice
Q 58Q 58
Use the following to answer questions 66-71:
-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of potatoes would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.
A)increase;horizontal;away from
B)decrease;horizontal;toward
C)increase;vertical;away from
D)decrease;vertical;away from
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Multiple Choice
Q 59Q 59
Use the following to answer questions 66-71:
-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.An increase in income would:
A)rotate the budget line,changing the intercept on the horizontal axis.
B)shift the budget line to the left.
C)rotate the budget line,changing the intercept on the vertical axis.
D)shift the budget line to the right.
Free
Multiple Choice
Q 60Q 60
Use the following to answer questions 66-71:
-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A decrease in income would:
A)rotate the budget line,changing the intercept on the horizontal axis.
B)shift the budget line to the left.
C)rotate the budget line,changing the intercept on the vertical axis.
D)shift the budget line to the right.
Free
Multiple Choice
Q 61Q 61
A consumer's spending is restricted because of:
A)marginal utility.
B)total utility.
C)his or her budget constraint.
D)utility maximization.
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Multiple Choice
Q 62Q 62
Whatever the time period in question,Molly's spending will be _____ by her _____.
A)unlimited;marginal utility
B)limited;marginal utility
C)limited;budget
D)unlimited;budget
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Multiple Choice
Q 63Q 63
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies ON Tom's budget line. Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
A)50;10
B)50;0
C)0;5
D)100;5
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Multiple Choice
Q 64Q 64
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies INSIDE Tom's budget line (meaning Tom can afford this combination,but he will not be spending the entire $50). Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
A)50;10
B)50;0
C)0;5
D)100;5
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Multiple Choice
Q 65Q 65
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies OUTSIDE Tom's budget line (meaning Tom cannot afford this combination). Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
A)50;10
B)50;0
C)0;5
D)20;5
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Multiple Choice
Q 66Q 66
Juan spends all of his income on packs of baseball cards and boxes of candy.At his current consumption bundle,the marginal utility of baseball card packs is 20 and the marginal utility of candy boxes is 10.Assuming that diminishing marginal utility applies to both goods,if the price of baseball card packs is $10 and the price of candy boxes is $2,Juan should:
A)consume more baseball card packs and fewer candy boxes.
B)consume more candy boxes and fewer baseball card packs.
C)continue to consume the current bundle.
D)consume equal numbers of baseball card packs and candy boxes.
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Multiple Choice
Q 67Q 67
At the optimal consumption bundle:
A)the marginal utility of all goods consumed is equal.
B)the marginal utility per dollar spent is equalized across all goods consumed.
C)the price of all goods consumed is equal.
D)total utility from all goods consumed is equal.
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Multiple Choice
Q 68Q 68
Diego spends all of his income on milkshakes and french fries.At his current consumption levels,the marginal utility of one milkshake and the marginal utility of one order of french fries are equal.According to the optimal consumption rule,Diego:
A)is maximizing his utility.
B)is maximizing his utility only if one milkshake and one order of french fries have the same price.
C)should buy more milkshakes and fewer fries if a milkshake costs more than an order of fries.
D)will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both.
Free
Multiple Choice
Q 69Q 69
Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income.If a consumer purchases a combination of coffee and football tickets such that MUCoffee/ /PCoffee = 20 and MUFootball tickets/ /PFootball tickets = 10,to maximize utility,the consumer should buy _____ coffee and _____ football tickets.
A)less;more
B)more;fewer
C)more;more
D)less;fewer
Free
Multiple Choice
Q 70Q 70
Assume that diminishing marginal utility applies to both dish soap and floor wax and that Minh is spending all of her income.If Minh purchases a combination of dish soap and floor wax such that MUDish soap/ /PDish soap = 50 and MUFloor wax/ /PFloor wax = 30,to maximize utility,Minh should buy _____ soap and _____ floor wax.
A)less;less
B)more;more
C)more;less
D)less;more
Free
Multiple Choice
Q 71Q 71
Assume that diminishing marginal utility applies to both ballet slippers and tutus and that Natasha is spending all of her income.If Natasha purchases a combination of ballet slippers and tutus such that MUSlippers/ /PSlippers = 20 and MUTutus/ /PTutus = 5,to maximize utility,Natasha should buy _____ slippers and _____ tutus.
A)more;fewer
B)fewer;more
C)more;more
D)fewer;fewer
Free
Multiple Choice
Q 72Q 72
Assume that diminishing marginal utility applies to both textbooks and concert tickets and that Sun is spending all of his income.If Sun purchases a combination of textbooks and concert tickets such that MUTextbooks/PTextbooks = 100 and MUTickets/ /PTickets = 80,to maximize utility,Sun should buy _____ textbooks and _____ tickets.
A)fewer;fewer
B)more;fewer
C)fewer;more
D)more;more
Free
Multiple Choice
Q 73Q 73
If,for Adam,the marginal utility of ties is greater than the marginal utility of shirts,to maximize utility,Adam should:
A)buy more ties and fewer shirts.
B)buy more shirts and fewer ties.
C)buy the same number of each.
D)determine the price of ties and the price of shirts before he decides how many of each to buy.
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Multiple Choice
Q 74Q 74
If a consumer derives more utility by spending an additional $1 on good X,rather than on good Y:
A)MUx/Px > MUy/Py.
B)MUx/Px = MUy/Py.
C)MUx/Px < MUy/Py.
D)Px/MUx > Py/MUy.
Free
Multiple Choice
Q 75Q 75
Sally devotes all of her income to the consumption of apples and Reese's Peanut Butter Cups.At her current level of consumption,the marginal utility of an apple is 6 and the marginal utility of a Reese's Peanut Butter Cup is 8.Assume that diminishing marginal utility applies to both apples and Reese's Peanut Butter Cups.Suppose the price of an apple is $0.20 and the price of a Reese's Peanut Butter Cup is $0.25.To maximize her total utility,assuming that the goods are divisible,she would:
A)consume more Reese's Peanut Butter Cups and fewer apples.
B)consume less of both goods.
C)consume more apples and fewer Reese's Peanut Butter Cups.
D)There is not enough information to justify a change in her current level of consumption.
Free
Multiple Choice
Q 76Q 76
Sally devotes all of her income to the consumption of apples and Reese's Peanut Butter Cups.At her current level of consumption,the marginal utility of an apple is 6 and the marginal utility of a Reese's Peanut Butter Cup is 8.Assume that diminishing marginal utility applies to both apples and Reese's Peanut Butter Cups.Suppose the price of an apple is $0.10,while the price of a Reese's Peanut Butter Cup is $0.25.To maximize her total utility,assuming that the goods are divisible,she would:
A)consume more Reese's Peanut Butter Cups and fewer apples.
B)consume less of both goods.
C)consume more apples and fewer Reese's Peanut Butter Cups.
D)There is not enough information to justify a change in her current level of consumption.
Free
Multiple Choice
Q 77Q 77
Assume that Siri is consuming the utility-maximizing quantities of pork and chicken.We can conclude that:
A)the price of pork equals the price of chicken.
B)the marginal utility of pork equals the marginal utility of chicken.
C)the ratio of the marginal utility to price is the same for pork as it is for chicken.
D)Siri is consuming the same amount of pork and chicken.
Free
Multiple Choice
Q 78Q 78
Smedley,a careful utility maximizer,consumes peanut butter and ice cream.Assume that both peanut butter and ice cream are normal goods.Right after he achieves the utility-maximizing level of consumption of the two goods,the price of ice cream increases.To adjust to this event,he consumes _____ peanut butter and _____ ice cream.
A)more;more
B)less;less
C)more;less
D)less;more
Free
Multiple Choice
Q 79Q 79
Smedley,a careful utility maximizer,consumes peanut butter and broccoli.Assume that both peanut butter and broccoli are normal goods.Right after he achieves the utility-maximizing level of consumption of the two goods,the price of broccoli increases.To adjust to this event,he consumes _____ peanut butter and _____ broccoli.
A)more;less
B)less;less
C)more;more
D)less;more
Free
Multiple Choice
Q 80Q 80
Jill,a careful utility maximizer,consumes peanut butter and ice cream.Assume that both peanut butter and ice cream are normal goods.Right after she achieves the utility-maximizing level of consumption of the two goods,the price of peanut butter increases.After she adjusts to this event,the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
A)up;up
B)down;down
C)down;up
D)up;down
Free
Multiple Choice
Q 81Q 81
Kawamura,a careful utility maximizer,consumes peanut butter and ice cream.Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods.Right after he achieves the utility-maximizing level of consumption of the two goods,the price of peanut butter falls.After he adjusts to this event,the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
A)up;up
B)down;down
C)down;up
D)up;down
Free
Multiple Choice
Q 82Q 82
Marge has spent her entire budget on milk and cookies.The last glass of milk provided Marge with 10 additional utils,and the last cookie provided her with 25 additional utils.The price of a cookie is twice the price of a glass of milk.Assuming that diminishing marginal utility applies to both goods,Marge should consume _____ milk and _____ cookies.
A)more;fewer
B)less;more
C)more;more
D)less;fewer
Free
Multiple Choice
Q 83Q 83
Nancy is consuming her optimal consumption bundle of burritos and margaritas.The marginal utility of her last burrito was 75 utils,and each burrito costs $3.Her marginal utility of her last margarita was 100 utils.What is the price of a margarita?
A)$1
B)$2
C)$3
D)$4
Free
Multiple Choice
Q 84Q 84
The optimal consumption rule for all goods requires the:
A)marginal utility of all goods consumed divided by their respective prices to be equal to the budget constraint.
B)marginal utility of all goods consumed to exceed the total utility of all goods.
C)marginal utility of all goods consumed divided by their respective prices to be equal.
D)prices of all goods to be equal.
Free
Multiple Choice
Q 85Q 85
Faced with two goods to buy,diamonds and silver,a utility-maximizing individual will buy according to which rule?
A)The price of diamonds equals the price of silver.
B)The marginal utility of diamonds equals the marginal utility of silver.
C)The price of diamonds divided by the marginal utility of silver equals the price of silver divided by the marginal utility of diamonds.
D)The marginal utility of diamonds divided by the price of diamonds equals the marginal utility of silver divided by the price of silver.
Free
Multiple Choice
Q 86Q 86
Tori devotes all of her income to the consumption of peanut butter and jelly.She has just discovered that at her current level of consumption the marginal utility of a jar of peanut butter is 5 and the marginal utility of a jar of jelly is 7.Which statement is TRUE?
A)To maximize her total utility,Tori should consume more of both goods.
B)To maximize her total utility,Tori should consume less of both goods.
C)To maximize her total utility,Tori should consume more peanut butter and less jelly.
D)There is not enough information provided to justify a change in Tori's level of consumption.
Free
Multiple Choice
Q 87Q 87
Antonio derives more utility from spending an additional dollar on boots than on gloves.We can assume that:
A)the marginal utility per dollar spent on boots is greater than the marginal utility per dollar spent on gloves.
B)the marginal utility per dollar spent on boots is equal to the marginal utility per dollar spent on gloves.
C)the marginal utility per dollar spent on boots is less than the marginal utility per dollar spent on gloves.
D)boots cost less than gloves.
Free
Multiple Choice
Q 88Q 88
If Paloma is consuming the utility-maximizing quantities of pizza and soda pop:
A)the price of pizza equals the price of soda pop.
B)the marginal utility of pizza is equal to the marginal utility of soda pop.
C)the ratio of the marginal utility to price is the same for pizza as it is for soda pop.
D)the total utility of pizza is equal to the total utility of soda pop.
Free
Multiple Choice
Q 89Q 89
Steven consumes staples and paper clips.He is maximizing his utility in consumption of both goods.The price of staples falls.After the change in price,Steven should consume _____ staples and _____ paper clips.
A)more;more
B)more;fewer
C)fewer;fewer
D)fewer;more
Free
Multiple Choice
Q 90Q 90
Steven consumes staples and paper clips.He is maximizing his utility in consumption of both goods.The price of staples rises.After the change in price,Steven should consume _____ staples and _____ paper clips.
A)more;fewer
B)more;more
C)fewer;more
D)fewer;fewer
Free
Multiple Choice
Q 91Q 91
Steven consumes staples and paper clips.He is maximizing his utility in consumption of both goods.The price of paper clips rises.Assuming that diminishing marginal utility applies to both goods,as Steven adjusts to this event,the marginal utility of staples will _____,and the marginal utility of paper clips will _____.
A)rise;fall
B)fall;rise
C)rise;rise
D)fall;fall
Free
Multiple Choice
Q 92Q 92
Steven consumes staples and paper clips.He is maximizing his utility in consumption of both goods.The price of staples falls.Assuming that diminishing marginal utility applies to both goods,as Steven adjusts to this event,the marginal utility of staples will _____,and the marginal utility of paper clips will _____.
A)rise;fall
B)rise;rise
C)fall;fall
D)fall;rise
Free
Multiple Choice
Q 93Q 93
John consumes pizza and pasta,both normal goods.He is maximizing his utility in consumption of both goods.The price of pasta rises.Assuming that diminishing marginal utility applies to both goods,as John adjusts to this event,the marginal utility of pizza will _____,and the marginal utility of pasta will _____.
A)rise;rise
B)fall;fall
C)fall;rise
D)rise;fall
Free
Multiple Choice
Q 94Q 94
Wolfgang really likes both rutabagas and broccoli.The price of each good is $0.60 per pound and Wolfgang is maximizing utility.At the point of maximal utility,the marginal utility of:
A)rutabagas and broccoli is the same.
B)rutabagas is greater than the marginal utility of broccoli.
C)broccoli is greater than the marginal utility of rutabagas.
D)both goods is zero.
Free
Multiple Choice
Q 95Q 95
Wolfgang really likes both rutabagas and broccoli.Suppose the price of each good is $0.60 per pound and Wolfgang is maximizing utility,consuming 5 pounds of rutabagas and 0.5 pound of broccoli per month.At the point of maximal utility,the marginal utility of:
A)the two goods is the same.
B)rutabagas is greater than that of broccoli.
C)broccoli is greater than that of rutabagas.
D)both goods is zero.
Free
Multiple Choice
Q 96Q 96
(Table: Utility from Milk and Honey)Use Table: Utility from Milk and Honey.The price of milk is $2,and the price of honey is $4.If Max's income is $16,he buys _____ bottle(s)of milk and _____ jar(s)of honey.
A)1;1
B)4;2
C)5;4
D)6;0
Free
Multiple Choice
Q 97Q 97
(Table: Utility from Pizza and Beer)Use Table: Utility from Pizza and Beer.At All-Sports Bar,a bottle of beer costs $4,and a slice of pizza costs $2.Denard has $10 to spend on beer and pizza.To maximize his utility,Denard will consume _____ slice(s)of pizza and _____ bottle(s)of beer.
A)5;0
B)3;1
C)1;2
D)4;3
Free
Multiple Choice
Q 98Q 98
Use the following to answer questions 170-171:
-(Table: Utility from Burgers and Milkshakes)Use Table: Utility from Burgers and Milkshakes.David's marginal utilities for milkshakes and burgers are given in the table.The price of milkshakes is $2,and the price of burgers is $5.If David's income is $22,to maximize his utility,he buys _____ shake(s)and _____ burger(s).
A)1;1
B)6;0
C)5;1
D)6;2
Free
Multiple Choice
Q 99Q 99
Use the following to answer questions 170-171:
-(Table: Utility from Burgers and Milkshakes)Use Table: Utility from Burgers and Milkshakes.David's marginal utilities for milkshakes and burgers are given in the table.The price of milkshakes is $2,and the price of burgers is $5.If David's income is $10,to maximize his utility,he buys _____ shake(s)and _____ burger(s).
A)1;1
B)0;2
C)5;0
D)2;1
Free
Multiple Choice
Q 100Q 100
Use the following to answer questions 170-171:
-(Table: Marginal Utility per Dollar)Use Table: Marginal Utility per Dollar.If Damian has $9 to spend on potatoes and clams,then the utility-maximizing combination is _____ pound(s)of clams and _____ pound(s)of potatoes.
A)0;9
B)2;2
C)1;6
D)2;3
Free
Multiple Choice
Q 101Q 101
Use the following to answer questions 170-171:
-(Table: Marginal Utility per Dollar II)Use Table: Marginal Utility per Dollar II.If Manuel has $18 to spend on potatoes and clams,then the utility-maximizing combination is _____ pound(s)of clams and _____ pound(s)of potatoes.
A)5;3
B)4;6
C)1;6
D)3;9
Free
Multiple Choice
Q 102Q 102
Use the following to answer questions 170-171:
-(Table: Marginal Utility per Dollar III)Use Table: Marginal Utility per Dollar III.If Liyun has $20 to spend on potatoes and clams,then the utility-maximizing combination is _____ pound(s)of clams and _____ pound(s)of potatoes.
A)2;6
B)3;4
C)1;8
D)3;9
Free
Multiple Choice
Q 103Q 103
Use the following to answer questions 170-171:
-(Table: Marginal Utility per Dollar IV)Use Table: Marginal Utility per Dollar IV.If Ashyra has $40 to spend on potatoes and clams,then the utility-maximizing combination is _____ pound(s)of clams and _____ pound(s)of potatoes.
A)3;4
B)2;5
C)1;8
D)2;6
Free
Multiple Choice
Q 104Q 104
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of both goods is $1 per unit,that you consume three units of good X and three units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would want to consume _____ of X and _____ of Y.
A)less;less
B)more;more
C)less;more
D)more;less
Free
Multiple Choice
Q 105Q 105
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of both goods is $1 per unit,that you consume four units of good X and two units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;more
B)more;more
C)less;less
D)more;less
Free
Multiple Choice
Q 106Q 106
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of good X is $2 per unit and the price of good Y is $1 per unit,that you consume three units of good X and three units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;less
B)more;more
C)less;more
D)more;less
Free
Multiple Choice
Q 107Q 107
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of good X is $1 per unit and the price of good Y is $2 per unit,that you consume 4 units of good X and 2 units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;less
B)more;more
C)less;more
D)more;less
Free
Multiple Choice
Q 108Q 108
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that goods X and Y both cost $1 per unit and you have $4 to spend on both goods.To maximize utility,you would consume _____ unit(s)of X and _____ unit(s)of Y.
A)0;4
B)1;3
C)2;2
D)3;1
Free
Multiple Choice
Q 109Q 109
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that goods X and Y both cost $1 per unit and you have $7 to spend on both goods.To maximize utility,you would consume _____ units of X and _____ units of Y.
A)2;5
B)3;4
C)4;3
D)5;2
Free
Multiple Choice
Q 110Q 110
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of good X is $5 per unit,that the price of good Y is $1 per unit,and that you have $10 to spend on both goods.To maximize utility,you would consume _____ unit(s)of X and _____ unit(s)of Y.
A)0;1
B)1;5
C)4;6
D)5;5
Free
Multiple Choice
Q 111Q 111
Use the following to answer questions 176-183:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of good X is $2 per unit,that the price of good Y is $1 per unit,and that you have $10 to spend on both goods.To maximize utility,you would consume _____ units of X and _____ units of Y.
A)3;4
B)2;3
C)2;6
D)5;0
Free
Multiple Choice
Q 112Q 112
Choices that maximize total utility generally produce demand curves that are:
A)horizontal.
B)upward sloping.
C)downward sloping.
D)straight lines.
Free
Multiple Choice
Q 113Q 113
If the price of coffee cups falls and the consumer decides to buy more coffee cups solely because they are less expensive,this describes the:
A)income effect.
B)substitution effect.
C)consumer surplus effect.
D)marginal-maximizing rule.
Free
Multiple Choice
Q 114Q 114
The substitution effect of a price change is described by the statement that:
A)when the price of canning jars falls,consumers have more real income with the same nominal income and will buy more canning jars.
B)when the price of canning jars falls,consumers will substitute these lower-priced canning jars for higher-priced goods.
C)the substitution effect is the change in the number of canning jars purchased when the price of spatulas changes.
D)the substitution effect shows how a change in income will affect the quantity of a good purchased.
Free
Multiple Choice
Q 115Q 115
According to the substitution effect,which statement BEST describes why a decrease in the price of LED light bulbs leads to an increase in the quantity of LED light bulbs demanded?
A)Buyers have more real income.
B)Buyers always purchase fewer substitute goods for LED light bulbs.
C)Buyers tend to purchase more of the now less expensive LED light bulbs.
D)Buyers tend to purchase more complementary goods to LED light bulbs.
Free
Multiple Choice
Q 116Q 116
The substitution effect always entails a change in consumption in the _____ direction as (of)the change in _____.
A)same;marginal utility
B)same;price
C)opposite;price
D)opposite;the budget
Free
Multiple Choice
Q 117Q 117
According to the substitution effect,a decrease in the price of a product leads to an increase in the quantity of the product demanded because buyers:
A)have more real income.
B)purchase fewer substitute goods.
C)purchase more of the now less expensive good.
D)purchase more complementary goods.
Free
Multiple Choice
Q 118Q 118
The substitution effect always involves a change in consumption in the _____ direction as (to)the _____ change.
A)same;budget
B)same;price
C)opposite;price
D)opposite;budget
Free
Multiple Choice
Q 119Q 119
If,because of a price change,both the income and substitution effects are strong for a normal good,this segment of the demand curve must be:
A)unit-elastic.
B)vertical.
C)relatively price-elastic.
D)horizontal.
Free
Multiple Choice
Q 120Q 120
A Giffin good is one in which the _____ curve is _____ sloping.
A)supply;downward
B)demand;downward
C)supply;upward
D)demand;upward
Free
Multiple Choice
Q 121Q 121
Jane is a utility-maximizing consumer who is spending her entire budget on the optimal quantity of wallets and eyeglasses.The price of wallets falls.Jane will _____ her consumption of wallets if wallets are a(n)_____ good and (because)the income effect _____ the substitution effect.
A)decrease;inferior;is weaker than
B)increase;inferior;is stronger than
C)increase;normal;reinforces
D)decrease;normal;reinforces
Free
Multiple Choice
Q 122Q 122
Which statement BEST describes the income effect of a price increase?
A)The price of bacon increases,so Michelle buys more sausage.
B)The price of corn chips increases,so Michelle buys potato chips.
C)The tuition at the public university increases,so Michelle attends a community college.
D)Michelle's apartment rent increases,so she cancels her subscription to a monthly magazine.
Free
Multiple Choice
Q 123Q 123
The demand curve for a normal good will always slope downward because:
A)the substitution effect and the income effect reinforce each other,and the substitution effect always displays an inverse relation between price and quantity demanded.
B)the substitution effect and the income effect reinforce each other,and the income effect always displays an inverse relation between price and quantity demanded.
C)even though the substitution effect and the income effect move in opposite directions,the substitution effect dominates,and it always displays an inverse relation between price and quantity demanded.
D)even though the substitution effect and the income effect move in opposite directions,the income effect dominates,and it always displays an inverse relation between price and quantity demanded.
Free
Multiple Choice
Q 124Q 124
For most goods,demand curves slope downward because:
A)marginal utility rises as quantity demanded increases.
B)the substitution effect constitutes almost the entire effect of a price change,and this effect always causes quantity demanded and price to be inversely related.
C)the income effect constitutes almost the entire effect of a price change,and this effect always causes quantity demanded and price to be inversely related.
D)the income and substitution effects work in opposite directions.
Free
Multiple Choice
Q 125Q 125
The income effect of a price change is the effect on consumption changes as a result of a change in:
A)income when all prices change in the same proportion.
B)purchasing power caused by a change in the price of the good.
C)income caused by a change in the price of labor.
D)income sufficient to offset the effect of a price change.
Free
Multiple Choice
Q 126Q 126
The income effects of a change in price are most important for goods that:
A)take up a substantial share of a consumer's spending.
B)are very inexpensive.
C)are imported.
D)are normal.
Free
Multiple Choice
Q 127Q 127
Which statement is FALSE?
A)A Giffin good must be an inferior good.
B)A Giffin good must be such that the income effect and the substitution effect move in opposite directions,and the income effect outweighs the substitution effect.
C)A Giffin good must be such that the substitution effect outweighs the income effect for an inferior good.
D)A Giffin good must have an upward-sloping demand curve.
Free
Multiple Choice
Q 128Q 128
Assume that,as the price of cauliflower falls,the income effect causes consumers to buy fewer heads of cauliflower.We can conclude that cauliflower is:
A)an inferior good.
B)nasty tasting.
C)a normal good.
D)expensive.
Free
Multiple Choice
Q 129Q 129
The income effect can refer to a change in:
A)income because of a change in business investment.
B)money or nominal income because of a change in wages.
C)the quantity demanded of a good because of an implicit change in the buyer's income caused by a change in the price of a good or service.
D)the quantity demanded of a good because of a change in the buyer's preferences.
Free
Multiple Choice
Q 130Q 130
Which statement is FALSE?
A)The income effect of normal goods counters the substitution effect,so the demand curve slopes upward.
B)The income effect and the substitution effect reinforce each other when the price of a normal good changes.
C)The income effect represents the decrease in quantity demanded caused by the implicit change in income due to a fall in the price of an inferior good but not of a normal good.
D)The substitution effect reflects the change in quantity demanded solely because of a change in the relative price of a good.
Free
Multiple Choice
Q 131Q 131
When the price of an inferior good falls,the substitution effect contributes to a(n)_____ in the quantity demanded,and the income effect _____ the substitution effect.
A)decrease;reinforces
B)increase;reinforces
C)increase;opposes
D)decrease;opposes
Free
Multiple Choice
Q 132Q 132
Use the following to answer questions 204-205:
-(Table: Utility from Candy Bars and Sodas)Use Table: Utility from Candy Bars and Sodas.If Stan consumes two candy bars and two sodas,his total utility will be _____ utils.
A)15
B)33
C)18
D)78
Free
Multiple Choice
Q 133Q 133
Use the following to answer questions 204-205:
-(Table: Utility from Candy Bars and Sodas)Use Table: Utility from Candy Bars and Sodas.Stan's daily income is $11,the price of a candy bar is $2,and the price of a soda is $1.Given this budget constraint,Stan will receive the MOST utils from consuming _____ candy bar(s)and _____ sodas.
A)3;5
B)1;4
C)5;6
D)2;7
Free
Multiple Choice
Q 134Q 134
The assumption that a rational consumer seeks to maximize his or her utility implies that utility is measurable according to some objective scale.
Free
True False
Q 135Q 135
Gehrig's utility from the consumption of mangoes is measured by the level of satisfaction he gets from only the first mango he buys and eats.
Free
True False
Q 136Q 136
The marginal utility of a good is used to describe any good (such as a mushroom brush or a shrimp deveiner)that has only limited usefulness.
Free
True False
Q 137Q 137
If Joe drinks iced tea while he is mowing his yard,he will probably derive a lower marginal utility from his sixth glass of iced tea than from his first glass.
Free
True False
Q 138Q 138
Mary,an avid gardener,plans to spend 8 hours working in her garden.It takes her 45 minutes to prune a bush and 30 minutes to fertilize a tree.If she prunes eight bushes,she will still have enough time to fertilize six trees.
Free
True False
Q 139Q 139
A person's consumption possibilities include all points on their budget line as well as all points below the budget line.
Free
True False
Q 140Q 140
The optimal consumption bundle is the combination of goods that lies above the budget constraint.
Free
True False
Q 141Q 141
Professor Makrung spends his entire weekly income of $700 on economics books (E)and coffee (C).The price of an economics book (PE)is $50,and the price of a cup of coffee (PC)is $2.If the professor buys 10 economics books and 50 cups of coffee per week,he finds that MUE = 75 and MUC = 3.This implies that a consumption bundle consisting of 10 economics books and 50 cups of coffee per week maximizes the professor's utility.
Free
True False
Q 142Q 142
Mikaela is buying a new motorcycle.She has narrowed her choices to a BMW Classic Montauk or a Honda Valkyrie Rune.She likes the Honda exactly twice as much,but it costs about 40% more.If both bikes are in her budget,she should buy the Honda.
Free
True False
Q 143Q 143
If the price of laundry detergent equals the price of dishwashing powder,then a utility-maximizing consumer will always buy equal amounts of laundry detergent and dishwashing powder.
Free
True False
Q 144Q 144
At Frankie's Buy-the-Slice Pizza,Bill eats three slices of pizza and then realizes that he enjoyed the second slice more than the third.Even though the price per slice is just $1,the utility-maximizing decision is to quit eating now since Bill has reached diminishing marginal utility.
Free
True False
Q 145Q 145
At Frankie's Buy-the-Slice Pizza,Brian eats eight slices of pizza.He says that,because pizza is $2 per slice,the utility-maximizing decision is to eat until your marginal utility per dollar is zero.Brian's explanation is correct.
Free
True False
Q 146Q 146
If the marginal utility of hot dogs exceeds the marginal utility of french fries,then the consumer should necessarily adjust their consumption toward eating more hot dogs and fewer french fries.
Free
True False
Q 147Q 147
If the price of pecan rolls is $2,the price of a gyro is $6,and the marginal utility of the last pecan roll consumed is 12,then the marginal utility of the last gyro consumed for a consumer purchasing the optimal consumption bundle of pecan rolls and gyros is 36.
Free
True False
Q 148Q 148
Suppose Sirach knows that the price of doughnuts is $3 and the price of cupcakes is $4.He also knows that the next doughnut he consumes will increase his total utility by 6 utils and the next cupcake will increase his total utility by 10 utils.Assuming he has enough money to buy either,Sirach should buy a doughnut next.
Free
True False
Q 149Q 149
At the optimal consumption bundle,the marginal utility derived from the last unit of each good purchased is always the same.
Free
True False
Q 150Q 150
The optimal consumption rule implies that,if Pascal is maximizing his utility by spending all of his income on concert tickets and cab rides,with prices equal to PTickets and PRides,respectively,then it must be the case that MUTickets/MURides = PTickets/PRides.
Free
True False
Free
True False
Q 152Q 152
If the substitution effect and the income effect of a price change move in opposite directions for a particular good,then the good must be an inferior good.
Free
True False
Q 153Q 153
When the price of Spam (an inferior good)decreased,Dale bought more Spam.For Dale,the income and substitution effects moved in the same direction.
Free
True False
Q 154Q 154
For a Giffin good,the income effect works in the opposite direction from the substitution effect,and the income effect is larger than the substitution effect.
Free
True False
Q 155Q 155
In the standard models in economics,consumers maximize utility because they are:
A)rational.
B)demand-constrained.
C)inferior.
D)comfortable.
Free
Multiple Choice
Q 156Q 156
The satisfaction that a consumer gets from the consumption of a bundle of goods and services is:
A)utility.
B)rationalization.
C)budget constraints.
D)income.
Free
Multiple Choice
Q 157Q 157
Use the following to answer questions 239-241:
-(Table: Alaina's Utility from Consuming Cups of Coffee)Use Table: Alaina's Utility from Consuming Cups of Coffee.Given the information in the table,Alaina's total utility from drinking coffee:
A)decreases as she consumes additional coffee.
B)increases at a decreasing rate as she consumes more coffee.
C)stays constant as she consumes more coffee.
D)equals 0 utils.
Free
Multiple Choice
Q 158Q 158
Use the following to answer questions 239-241:
-(Table: Alaina's Utility from Consuming Cups of Coffee)Use Table: Alaina's Utility from Consuming Cups of Coffee.Alaina's marginal utility from consuming her sixth cup of coffee is _____ utils.
A)43
B)82
C)4
D)0
Free
Multiple Choice
Q 159Q 159
Use the following to answer questions 239-241:
-(Table: Alaina's Utility from Consuming Cups of Coffee)Use Table: Alaina's Utility from Consuming Cups of Coffee.Diminishing marginal utility is:
A)not present in Alaina's consumption of coffee since her total utility keeps increasing.
B)present in Alaina's consumption of coffee since her total utility increases at a decreasing rate with each cup consumed.
C)equal to 0 utils.
D)not present since Alaina exhibits increasing marginal utility.
Free
Multiple Choice
Q 160Q 160
If marginal utility is diminishing,the marginal utility curve is _____ sloping since each additional unit of the good consumed yields _____ satisfaction than the unit that preceded it.
A)downward ;less
B)upward;more
C)downward;more
D)upward;less
Free
Multiple Choice
Q 161Q 161
George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).If the price of a doughnut is $1 and the price of coffee is $2.50,his budget constraint can be expressed as:
A)D 50 + 2.50C.
B)D 50 - 25C.
C)D 50 - 0.25C.
D)D 50 - 2.50C.
Free
Multiple Choice
Q 162Q 162
George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).If the price of a doughnut is $1 and the price of coffee is $2.50,which consumption bundle lies BEYOND George's budget constraint?
A)10C and 25D
B)15C and 15D
C)5C and 10D
D)5C and 5D
Free
Multiple Choice
Q 163Q 163
George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).The price of a doughnut is $1 and the price of coffee is $2.50.Suppose George's income increases to $100 and the prices of both doughnuts and coffee remain unchanged.Given this income change,one would expect George's budget line to:
A)shift to the right.
B)shift to the left.
C)rotate around the coffee axis point.
D)not be affected.
Free
Multiple Choice
Q 164Q 164
George has a weekly income (I)of $50,which he uses to purchase doughnuts (D)and coffee (C).The price of a doughnut is $1 and the price of coffee is $2.50.Suppose George's income drops to $25 and the prices of doughnuts and coffee each fall to one-half their initial prices.One would expect George's budget line to:
A)shift to the right.
B)shift to the left.
C)rotate around one of the axes,but we cannot tell which one.
D)stay the same.
Free
Multiple Choice
Q 165Q 165
Tonya's budget constraint for gallons of gasoline (G)and shirts (S)each month can be expressed by the equation G = 100 - 2S,where G is the number of gallons of gasoline she buys and S is the total number of shirts she buys.Assume that she spends her entire budget each month.If the price of shirts is $10,the price of gasoline is _____ per gallon,and the total amount of income spent on both shirts and gasoline each month is _____.
A)$5;$500
B)$2;$100
C)$1;$500
D)$2;$1,000
Free
Multiple Choice
Q 166Q 166
Tonya's budget constraint for gallons of gasoline (G)and shirts (S)each month can be expressed by the equation G = 100 - 2S,where G is the number of gallons of gasoline she buys and S is the total number of shirts she buys.Assume that she spends her entire budget each month.If the price of shirts is $10,which consumption bundle is NOT feasible for Tonya?
A)45 shirts and 100 gallons of gasoline
B)50 shirts and 0 gallons of gasoline
C)0 shirts and 100 gallons of gasoline
D)10 shirts and 5 gallons of gasoline
Free
Multiple Choice
Q 167Q 167
Tonya's budget constraint for gallons of gasoline (G)and shirts (S)each month can be expressed by the equation G = 100 - 2S,where G is the number of gallons of gasoline she buys and S is the total number of shirts she buys.Assume that she spends her entire budget each month.If the price of shirts is $10,which consumption bundle lies INSIDE Tonya's budget line?
A)45 shirts and 100 gallons of gasoline
B)50 shirts and 0 gallons of gasoline
C)0 shirts and 100 gallons of gasoline
D)10 shirts and 5 gallons of gasoline
Free
Multiple Choice
Q 168Q 168
Consumption bundles that Mei CANNOT afford because the bundles cost more than her income are _____ the budget line.
A)within
B)beyond
C)on
D)at the corner of
Free
Multiple Choice
Q 169Q 169
The consumption bundles that Mei CAN afford but that do not use up her entire income lie _____ the budget line.
A)within
B)beyond
C)on
D)at the corner of
Free
Multiple Choice
Q 170Q 170
Jie consumes three heads of broccoli and six bowls of rice each week,using up her weekly budget for these two items.The price of a head of broccoli is $2,and the price of rice is $4 per bowl.Jie's marginal utility from the last head of broccoli consumed is 4 utils,and her marginal utility from her last bowl of rice is 8 utils.If Jie wants to maximize her utility,she should:
A)increase her broccoli consumption and decrease her rice consumption.
B)increase her rice consumption and decrease her broccoli consumption.
C)not change her consumption of either broccoli or rice.
D)stop consuming both goods.
Free
Multiple Choice
Q 171Q 171
Sam always tries to maximize his utility in his consumption of popcorn and soft drinks.Both of these goods are subject to diminishing marginal utility.Suppose the prices of these goods,along with Sam's budget (and spending)for these items,stay the same,but Sam decides to decrease his consumption of popcorn.Holding everything else constant,this means that Sam must _____ his consumption of soft drinks,and his marginal utility per dollar spent on popcorn will be _____ than it used to be.
A)increase;greater
B)decrease;greater
C)increase;less
D)decrease;less
Free
Multiple Choice
Q 172Q 172
When a consumer maximizes utility,the marginal utility from the last dollar spent on all goods and services in the consumption bundle must be the same.This is referred to as:
A)the law of demand.
B)the optimal consumption rule.
C)the budget constraint.
D)consumption possibilities.
Free
Multiple Choice
Q 173Q 173
A consumer is attempting to maximize utility in her consumption of goods A and B.If her income and the price of good A do not change but the marginal utility of good B is constant and the price of good B decreases,this will _____ utility per dollar spent on good B.
A)decrease the marginal
B)not affect the marginal
C)decrease the total
D)increase the marginal
Free
Multiple Choice
Q 174Q 174
A decrease in the price of a good,holding income and the prices of all other goods constant,is associated with:
A)a positive substitution effect since consumers increase their consumption of the good as the marginal utility per dollar of the good increases.
B)a negative substitution effect since consumers decrease their consumption of the good as the marginal utility per dollar spent of the good decreases.
C)the consumer purchasing fewer of all goods in the consumption bundle.
D)a shift inward of the budget line.
Free
Multiple Choice
Q 175Q 175
Consuming more of a good that has become cheaper in place of a good that has become relatively more expensive is the:
A)income effect.
B)substitution effect.
C)budget constraint.
D)inferior effect.
Free
Multiple Choice
Q 176Q 176
The income effect will play a greater role in a consumer's spending if the good:
A)accounts for a substantial share of the consumer's spending.
B)accounts for a small share of the consumer's spending.
C)is not subject to a budget constraint.
D)is not something the consumer needs.
Free
Multiple Choice
Q 177Q 177
Housing is a normal good that tends to take up a substantial share of a consumer's spending.An increase in the price of housing will result in:
A)both an income and substitution effect to decrease the quantity demanded of housing.
B)both an income and substitution effect to increase the quantity demanded of housing.
C)the income effect of increasing the quantity demanded of housing and the substitution effect of decreasing the quantity demanded of housing.
D)the income effect of decreasing the quantity demanded of housing and the substitution effect of increasing the quantity demanded of housing.
Free
Multiple Choice
Q 178Q 178
If the price of a good changes so that the income effect and the substitution effect reinforce one another,this means the good is:
A)inferior.
B)always on the budget line.
C)normal.
D)not likely to be bought.
Free
Multiple Choice
Q 179Q 179
Use the following to answer questions 261-264:
-(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Given the information provided,the price of each cup of coffee is _____ and the price of each gallon of gasoline is _____.
A)$2;$2
B)$3;$6
C)$1;$2
D)$3;$3
Free
Multiple Choice
Q 180Q 180
Use the following to answer questions 261-264:
-(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Denise will maximize her utility by consuming bundle:
A)A.
B)B.
C)C.
D)D.
Free
Multiple Choice
Q 181Q 181
Use the following to answer questions 261-264:
-(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.When Denise maximizes her utility,her marginal utility per dollar spent on gallons of gasoline equals _____ utils per dollar.
A)0.6
B)0.8
C)0.5
D)1.6
Free
Multiple Choice
Q 182Q 182
Use the following to answer questions 261-264:
-(Table: Denise's Consumption of Coffee and Gasoline)Use Table: Denise's Consumption of Coffee and Gasoline.Suppose Denise initially chooses consumption bundle A.She can increase her total utility by:
A)consuming more gasoline and less coffee.
B)consuming more coffee and less gasoline.
C)not consuming more coffee or gasoline.
D)consuming more coffee and more gasoline.
Free
Multiple Choice