Unit 1: Lesson 5

marginal utility obtained from the last dollar spent on each product is the same.

To maximize utility, a consumer should allocate money income so that the:

4 of X and 5 of Y.

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2 respectively and that the consumer's income is $18 Refer to the data. If the price of X decreases to $2, then the utility-maximizing combination of the two products is:

2 of X and 5 of Y

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2 respectively and that the consumer's income is $18. Refer to the data. What quantities of X and Y should be purchased to maximize utility?

2 of L and 3 of M

Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4 respectively and that the consumer's income is $18. Refer to the data. How many units of the two products will the rational consumer purchase?

4 units of J and 5 units of K.

Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products J and K. Refer to the data. If the consumer has money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing:

1:2

At all Sports Bar, a bottle of beer costs $4; a slice of pizza costs $2; Jimmy has $10 to spend for beer and pizza; Jimmy will consumer____slices of pizza and ____bottles of beer

maximize their total utility.

By choosing to consume at the consumer optimum, consumers will

5 shakes and 0 burger

David's marginal utilities is in the table, the price of milkshakes is $2 and the price of burgers is $5; If David's income is $10, how many milkshakes and burgers does he buy?

$300.

Refer to Figure 5.16, If the price of a scoop of an ice cream cone is $2, Jason's income is

marginal utility of ice cream sandwiches to the marginal utility of ice cream cones.

Refer to Figure 5.16. The slope of the indifference curve is the ratio of the

64.

Refer to Table 5.1. The total utility of the fifth soda per day is

-5.

Refer to the above data, the value for Z is:

20

Refer to the above table, the value for W is:

15

Refer to the data. The value for X is:

D2

Refer to the table and graph. Suppose that the price of X falls from $2 to $1, while the price of Y remains at $4. Which of the following represents the demand curve for X if the consumer has money income of $10 to spend on X and Y?

utility.

The ability of a good or service to satisfy wants is called:

Zero

When total utility is maximized, marginal utility will be

change in total utility obtained by consuming one more unit of a good.

Marginal utility is the:

3 pounds of oranges, 4 pounds of starfruit

Oranges costs $2 per pound and starfruit cost $5 per pound. The table shows Ned's total utility from eating various amounts of oranges and starfruit. How many pounds of oranges and starfruit should Ned eat, if Ned has $26?

lower utility

Sara enjoys attending Chicago Cubs baseball games and eating baby back rib dinners. The accompanying figures shows two of her indifference curves for Cubs tickets and baby back rib dinners. If a new health report is released stating that there is a connection between baby back rib dinners and heart attacks and this concerns Sara, each combination of Cubs tickets and baby back ribs will now yield for Sara

4

Sara enjoys attending Chicago Cubs baseball games and eating baby back rib dinners. The accompanying figures shows two of her indifference curves for Cubs tickets and baby back rib dinners. If she is currently consuming 20 baby back rib dinners and 6 tickets to Cubs games, she would be equally happy to give up 8 dinners for ___ more tickets to Cubs games?

increases, and the marginal utility for water decreases.

Suppose a consumer consumes only diamonds and water, and the price of diamonds increases. All else being equal, a consumer's marginal utility for diamonds

the substitution effect and real-income effect, if there is a noticeable change in purchasing power

Suppose the price of a 75" HD TV remains the same and the price of an iPhone decreases. What noticeable effect(s) occur(s)?

8 units of utility.

The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The marginal utility of the third Pepsi is:

beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer.

The law of diminishing marginal utility states that:

reached a consumer optimum.

When consumers get the "biggest bang for the buck," we say they