Chapter 10 Micro
As a consumer consumes more and more of a product in a particular time period, eventually marginal utility A) declines. B) rises. C) is constant. D) fluctuates.
A
Economists assume that the goal of consumers is to A) make themselves as well off as possible. B) do as little work as possible to survive. C) expend all their income. D) consume as much as possible.
A
An item has utility for a consumer if it A) is scarce. B) has a high price. C) is something everyone else wants. D) generates enjoyment or satisfaction.
D
If Marlowe obtains 9 units of utility per dollar spent on apples and 6 units of utility per dollar spent on oranges, then Marlowe A) is maximizing total utility. B) should buy fewer oranges and fewer apples. C) should buy more oranges and fewer apples. D) should buy more apples and fewer oranges.
D
If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the second candy bar is A) 25 utility units. B) 20 utility units. C) 5 utility units. D) unknown as more information is needed to determine the answer.
D
If, as a person consumes more and more of a good, each additional unit adds less satisfaction than the previous unit consumed, we are seeing the workings of A) the law of supply. B) the law of demand. C) the law of increasing marginal opportunity cost. D) the law of diminishing marginal utility.
D
Suppose Barry is maximizing his utility from consuming used paperback novels and audio books. The price of a used novel = $4 and the price of an audio book = $8. If the marginal utility of the last novel was 32 units of utility (utils) what was the marginal utility of the last audio book purchased? A) 2 utils B) 12 utils C) 16 utils D) 64 utils
D
Suppose your marginal utility from consuming the 3rd slice of cake is zero, then your total utility from consuming cake is A) decreasing. B) negative. C) increasing. D) maximized.
D
The law of diminishing marginal utility states that A) the extra satisfaction from consuming a good increases slowly as more of a good is consumed, other things constant. B) when the extra satisfaction from consuming a good becomes negative, total utility starts falling, other things constant. C) eventually total utility falls as more of a good is consumed, other things constant. D) the extra satisfaction from consuming a good decreases as more of a good is consumed, other things constant.
D
The limitation that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as A) economizing behavior. B) maximizing behavior. C) the price constraint. D) the budget constraint.
D
Total utility A) is negative when marginal utility is declining. B) has a constant rate of increase as a person consumes more and more of a good. C) cannot decrease as a person consumes more and more of a good. D) is equal to the sum of the marginal utilities of all units consumed.
D
If total utility increases at a decreasing rate as a consumer consumes more coffee, then marginal utility must A) be negative. B) decrease. C) remains constant. D) increase also.
B
The satisfaction a person receives from consuming goods and services is called A) psychic income. B) utility. C) wealth. D) contentment.
B
Which of the following is likely to occur as the result of the law of diminishing marginal utility? A) Sabine's utility from her first granola bar is greater than Rachel's utility from her second granola bar. B) Wesley enjoyed his second bottle of iced tea less than his first bottle, other things constant. C) Petra's utility from her second apple was less than her satisfaction from her first orange. D) Hudson enjoyed his second slice of pizza more than his first.
B
Economists assume that the goal of consumers is to A) consume as much as possible. B) spend all their income. C) make themselves as well off as possible. D) do as little work as possible to survive.
C
If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the third candy bar is A) 25 utils. B) 20 utils. C) 5 utils. D) unknown as more information is needed to determine the answer.
C
If your total satisfaction increases when you consume another unit, your marginal utility must be A) increasing. B) decreasing. C) positive. D) negative.
C
If, when you consume another piece of candy, your marginal utility is zero, then A) you want more candy. B) you should consume less candy. C) you have maximized your total utility from consuming candy. D) you have not yet reached the point of diminishing marginal utility.
C
If Paul decides to buy a $60 ticket to a Cirque du Soleil show rather than a $45 ticket for a Blue Man Group performance, we can conclude that A) the marginal utility per dollar spent on Cirque du Soleil is higher than the marginal utility per dollar spent on Blue Man Group. B) the marginal utility per dollar spent on Cirque du Soleil is lower than the marginal utility per dollar spent on Blue Man Group. C) Paul's demand for a ticket to see Cirque du Soleil is more elastic than his demand for a ticket to see Blue Man Group. D) Paul is not making a rational choice.
A
If a consumer receives 22 units of marginal utility for consuming the first can of soda, 20 units from consuming the second, and 15 from the third, the total utility of consuming the three units is A) 57 utility units. B) 35 utility units. C) 15 utility units. D) unknown as more information is needed to determine the answer.
A
If, as a person consumes more and more of a good, each additional unit adds less satisfaction than the previous unit consumed, we are seeing the workings of A) the law of diminishing marginal utility. B) the law of demand. C) the law of increasing marginal opportunity cost. D) the law of supply.
A
If, when you consume another piece of candy, your marginal utility is zero, then A) you have maximized your total utility from consuming candy. B) you should consume less candy. C) you have not yet reached the point of diminishing marginal utility. D) you want more candy.
A
Marginal utility is the A) extra satisfaction received from consuming one more unit of a product. B) average satisfaction received from consuming a product. C) satisfaction achieved when a consumer has had enough of a product. D) total satisfaction received from consuming a given number of units of a product.
A
Marv Pilson has $50 worth of groceries in a shopping cart at his local Shop 'n Save. Assume that the marginal utility per dollar of the liter bottles of soft drink in Marv's cart equals 50. The marginal utility per dollar of the boxes of cereal in Marv's cart equals 20. Marv has only $50 to spend, but has not yet paid for his groceries. How can Marv increase his total utility without spending more than $50? A) Marv should buy fewer boxes of cereal and more bottles of soft drink. B) Marv should buy more boxes of cereal and fewer bottles of soft drink. C) Marv should substitute his favorite soft drink or the cereal in his cart for generic brands that have lower prices. D) Marv should buy fewer boxes of cereal and fewer bottles of soft drink. He can then spend more on other items.
A
Optimal decisions are made A) at the margin. B) if information about prices and marginal utilities is known. C) in the marketplace. D) when marginal utility is minimized.
A
Terence has $50 per week to spend on Subway sandwiches and milkshakes. The price of a Subway sandwich is $5 and the price of a milkshake is $4. He buys 6 sandwiches and 5 milkshakes. The marginal utility of the 6th sandwich = 25 and the marginal utility of the 5th milkshake = 24. Which of the following is true? A) He is not maximizing his utility and should buy more milkshakes. B) He is not maximizing his utility because he is not spending all of his income. C) He is not maximizing his utility and should buy more Subway sandwiches. D) He is maximizing his utility.
A
As a consumer consumes more and more of a product in a particular time period, eventually marginal utility A) fluctuates. B) declines. C) is constant. D) rises.
B
Avner is maximizing total utility by buying sports magazines and protein supplements. For him to buy more sports magazines A) the price of protein supplements. has to fall. B) the price of sports magazines has to fall. C) the price of sports magazines has to rise. D) Since Avner is maximizing his utility, nothing can change the consumption of sports magazines.
B
Carolyn spends her income on popular magazines and music CDs. If the price of a CD is four times the price of a magazine and if Carolyn is maximizing her utility, she buys A) four times as much magazines as CDs. B) both goods until the marginal utility of the last CD purchased is four times the marginal utility of the last magazine purchased. C) four times as much CDs as magazines. D) both goods until the marginal utility of the last magazine purchased is four times the marginal utility of the last CD purchased.
B
If Valerie purchases ankle socks at $5 and gets 25 units of marginal utility from the last unit, and bandanas at $3 and gets 12 units of marginal utility from the last bandana purchased, she A) wants to consume more bandanas and fewer ankle socks. B) wants to consume more ankle socks and fewer bandanas. C) wants to consume less of both ankle sock and bandanas. D) is maximizing total utility and does not want to change her consumption of ankle socks or bandanas.
B
If a consumer always buys goods rationally, then A) the marginal utility of the different goods consumed will be equal. B) the marginal utility per dollar spent on all goods will be equal. C) the average utilities of the different goods consumed will be equal. D) the total utilities of the different goods consumed will be equal.
B