MicroEconomics Chapter 6

Which of the following correctly explains the downward slope of a demand curve?

Marginal valuation refers to the dollar value of the marginal utility consumer derive from the last unit consumed. Because of the diminishing marginal utility, marginal valuations fall as more of a product is consumed, thus accounting for the downward slope of the demand curve

If the demand curve for a good was flat (horizontal) what would this say about marginal utility (marginal valuation)?

Marginal utility would be constant.

what impact does continuing consumption have on the marginal utility per dollar for a good

as more of the good is consumed, marginal utility per dollar continues to decline

What characteristic of the demand curve is explained by the law of diminishing marginal utility?

Because of diminishing marginal utility marginal valuations fall as more of a product is consumed does accounting for the downward slope of the demand curve.

Which of the following is NOT correct about consumer surplus?

By definition consumer surplus must always be greater than the total revenue earned by selling a good.

In terms of marginal utility when is consumer equilibrium reached?

Consumer equilibrium is reached when the marginal utility per dollar of each product is equal and the last dollar of one's budget is spent.

Which of the following is correct about the relationship between consumer equilibrium and marginal utility?

Consumer equilibrium is reached when the marginal utility per dollar of each product is equal and the last dollar of one's budget is spent.

Which of the following is NOT true of marginal utility

Consumers share the same utility derived from the most common goods

Which of the Following is NOT true of marginal utility

Diminishing marginal utility has no influence on the nature of demand or on the slope of the demand curve

What impact does continuing consumption have on the marginal utility derived from consuming one more good?

It reduces marginal utility.

Which of the following is correct about marginal utility

Marginal utility refers to the change in utility resulting from doing one more action or buying one more unit of a good

which economic principle explains why a pizza joint offers the sixth slice of pizza for the less than the price of the 5th slice of pizza and the fifth for the less than the fourth

The Law of diminishing marginal utility

Which of the following correctly defines and describes the Law of diminishing Utility

The Law of diminishing utility is the inevitable reduction in marginal utility that occurs as more units of a good are consumed or another hour of action is undertaked

Which of the following is NOT true about marginal utility and consumer surplus?

The marginal utility of a consumer's surplus is inversely related to the total utility of the supplier's marginal surplus.

what is the term economists use for the satisfaction consumers derive from consuming a good

Utility

what must a consumer do in order to reduce the marginal utility of a good

consume more of it

How do consumers maximize utility

consumers maximize utility by equalizing the marginal utility for the last dollar spent on each item

what does each point on the demand curve indicate?

each price point on a demand curve shows the marginal curve shows he maximum amount consumers are willing to pay for a given level of consumption, in other words, their marginal valuation of that level of consumption

which of the following is TRUE about marginal utility

marginal utility varies as individual tastes, preferences and expectations vary

If the marginal utility from a dollar spent on pizza is greater than the marginal utility of a dollar spent on beer, what should the consumer purchase next?

the consumer should buy one more slice of pizza which lowers the marginal utility of pizza closer or equal to the marginal utility of beer