ECON 2010 SUMR MircoEcon Ch 8 Assignment 6

Ed consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a Mountain Dew increases, Ed's demand curve for sub sandwiches will shift leftward. Ed will move upward along her demand curve for Mountain Dews. Ed will move downward along her demand curve for Mountain Dews. Both answers A and B are correct.

Both answers A and B are correct.

Which of the following occur when a person maximizes utility? I. The marginal utility of each good bought is equal. II. The highest level of utility is attained. III. All of a person's budget is spent. I and II II and III I and III I, II and III

II and III

Quantity Total utility Marginal utility 0 0 1 250 2 180 3 580 4 700 5 100 The above table gives some of Tammy's total and marginal utilities from comedy videos. Which of the following statements is true? Tammy's marginal utility from the first comedy video is less than her marginal utility from the third comedy video. Tammy's marginal utility from the third comedy video is equal to 580/3. Tammy's total utility from five comedy videos is 800. None of the above answers are correct.

Tammy's total utility from five comedy videos is 800.

Marginal utility measures the additional cost of an additional unit of consumption. additional utility from an additional unit of consumption. average utility from an additional unit of consumption. total utility from consumption.

additional utility from an additional unit of consumption.

Lucy buys only magazines and CDs. Both are normal goods. Lucy's income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that Lucy will ________. buy more magazines and more CDs buy fewer magazines and fewer CDs substitute magazines for CDs increase her marginal utility from both magazines and CDs by buying more magazines and CDs

buy fewer magazines and fewer CDs

Mark's marginal utility from reading books is the ________ when he reads ________. change in his total utility; more books total utility he gets; one more book consumer surplus he gets; books change in his total utility; one additional book

change in his total utility; one additional book

Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________. demand for; increases; quantity demanded of; decreases demand for; decreases; demand for; increases supply of; decreases; supply of; increases supply of; increases; demand for; decreases

demand for; increases; quantity demanded of; decreases

If Pete enjoys his first pancake of the morning much more than his fifth pancake of the morning, he is exhibiting diminishing marginal utility. utility maximizing behavior. diminishing total utility. irrational behavior.

diminishing marginal utility.

As Goldilocks consumes more gummy bears, her total utility ________ and her marginal utility from gummy bears ________. decreases; increases decreases; decreases increases; increases increases; decreases

increases; decreases

A person's consumption possibilities is defined by the budget line because it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources. it marks the boundary between what is affordable and unaffordable. all consumers must consume on their budget line. it represents the individual's preference for different combinations of goods.

it marks the boundary between what is affordable and unaffordable.

Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound and bananas cost $1 per pound. The marginal utility is 24 for the last pound of mangos purchased and 10 for the last pound of bananas. To maximize his utility, Robinson should buy the present combination of goods. only mangos. more bananas and fewer mangos. more mangos and fewer bananas.

more bananas and fewer mangos.

To maximize her utility, Pat should spend all of her money and buy goods in a way that her price elasticity of demand for each good is the same. the marginal utility of the last unit of each good is the same. the marginal utility per dollar from each good is the same. her total expenditure on each good is the same.

the marginal utility per dollar from each good is the same.

Utility is best defined as the practical usefulness of a good. the price of a good. the satisfaction from consuming a good. the amount one is willing to pay for a good.

the satisfaction from consuming a good.

The total utility from three skirts is three times the marginal utility of the third skirt. three skirts divided by total income. the sum of the marginal utility of the first skirt plus the marginal utility of the second skirt plus the marginal utility of the third skirt. three times the price of a skirt.

the sum of the marginal utility of the first skirt plus the marginal utility of the second skirt plus the marginal utility of the third skirt.

A measure of all the satisfaction you receive from all the coffee that you consume is your marginal utility per dollar spent on coffee. marginal utility per dollar spent on coffee when you are in your consumer equilibrium. marginal utility of coffee. total utility from coffee.

total utility from coffee.