chapter 5 micro quiz

pat just spent a thousand dollars on a painful dental procedure. in this case

we can assume that having the dental services performed increased Pat's utility

Jess gets half as much marginal utility from an additional bagel than from an additional muffin. if the price of muffin is $2 each then jess is maximizing utility if the price of the bagel is

$1

In the equilibrium, the price is ______, quantity is _______ and consumer surplus is ______

$6, 40, $120

suppose the dairy lobby convinces the government to impose price control in this market. If the government requires all cheese to be sold for a price of at least $8, consumer surplus would equal

$60

for two goods, A and B, the rational spending rule is expressed as

(MUa/ Pa) = (MUb/ Pb)

Taylor's optimal combination of movies and eating out is

2 movies and 4 dinners

If taylor eats out 3 times a month, Taylor will watch ____ movies, and have marginal utility per dollar of ____ from eating out and ____ from going to the movies

4, 6, 1/2

If taylor watches 2 movies a month, Taylor will eat out ____ times a month, and have marginal utility per dollar of ____ from movies and _____ from eating out

4,5,5

Jojo is shopping for anew computer. A mail-order computer can be delivered to Jojo's home fro $1200. Jojo could pick up the same computer at the warehouse for $1000. How should JoJo decide?

Jono should drive to the warehouse if the value of his travel time plus wear and tear on his car is less than $200

rice requires extensive irrigation, therefore water for rice farmers in California is

a want

according to the law of diminishing marginal utility

if you consume less of something, your marginal utility from that consumption increases

suppose a consumer protection group convinces the government to impose price controls in this market. If the government requires that cheese be sold for a price less than the equilibrium, realtive to the original equilibrium the effect on consumer surplus would be to

increase it due to the reduction in price, but decrease it due to the reduction in quantity

suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires all cheese to be sold for a price of at least $8, consumer surplus would ______ and the market would ______

decrease; have excess supply

During thanksgiving you participated in a pumpkin-pie eating contest since you love pumpkin pie. You really enjoyed the first two pies, the third one was OK, but as soon as you ate the 4th one you became ill and lost the contest. Beyond the 3rd pie your total utility

decreases

it is impossible for total utility to be _____ when marginal utility is _____

decreasing; positive

it is impossible for total utility to be _____ when marginal utility is_______

decreasing; positive

The first time Michael tasted coffee, he thought it was bitter and bad-tasting. The second time Michael had coffee, he thought it was barely tolerable. Eventually, Michael started to enjoy coffee, and within a few months he was drinking several cups a day. In fact, if he did not drink several cups a day, he was miserable. This suggests that , for Michael,

demand for coffee has increased

given that Chris's marginal utility from his 1st taco is 15 and 2nd is 12, one can infer Chris

has total utility of 2 tacos equal to 27

During thanksgiving you participated in a pumpkin-pie eating contest since you love pumpkin pie. You really enjoyed the first two pies, the third one was OK, but as soon as you ate the 4th one you became ill and lost the contest. Your total utility _____ with each pie you ate up to the 3rd pie.

increased

if terry gets maximization utility from owning 10 pairs of shoes, then terry's total utility from owning 7 pairs of shoes is ____ Terry's total utility from owning 8 pairs

less than

why do lines tend to be longer at the bank teller in poorer neighborhoods?

low-income customers are not willing to pay for shorter lines

in most markets scarce goods/services are rationed among competing users, and ______ perform the task

monetary prices

pats total utility after eating 99 Reese's was greater than his total utility after eating his hundredth. Therefore, Pats marginal utility for the 100th pb cup was

negative

suppose you are a government analyst, and you want to help homeless families. To do so, you have decided to subsidize rental housing for poor families. If families had been choosing rationally before the subsidy, what is most likely to happen as a result of the subsidy?

people will consume more housing and more of another good, for example, groceries

In some countries, medical care is provided free to citizens and paid for by the government. in those countries, medical care is

rationed by non-monetary costs

During thanksgiving you participated in a pumpkin-pie eating contest since you love pumpkin pie. You really enjoyed the first two pies, the third one was OK, but as soon as you ate the 4th one you became ill and lost the contest. Utility maximization means that people try to allocate their _____ to maximize their ______

resources, satisfaction

Higher education is a _____ and assigned textbooks are _____

want, wants

which of the statements is false?

the fourth burger usually increases total utility by more than the third burger

moes parents frequently tell him how it was back in the day. they had smaller house, fewer toys, only one car and one black and white tv but they were happy. in fact, does parents claim that they were happier than moe and his friends today even though they have so much more. moe concludes that

the social forces that influence demand have changes since moes parents were young

if the marginal utility of the 3rd cup of coffee is 23 and the marginal utility of the 4th cup is 15, then

there is evidence of the law of diminishing marginal utility

pat gets max utility when he eats 3 burgers and 2 orders of fries. if pat has already eaten 2 burger and 1 fries, pats

utility will increase if he eats another burger and fries

Suppose you want to make rational dining choices at an all-you can eat buffet. How do you apply the rational spending rule?

you should continue to eat until your marginal utility from consuming each item exactly equals zero plus your non-monetary costs of staying at the buffet