Chapter 6 Consumer Choice Utility Assignment

In order for an individual to achieve consumer equilibrium through the consumption of two goods, A and B, that individual must fulfill the condition

MUa/Pa = MUb/Pb

According to the videos, the consumers who ate the chocolate chip cookies and the pizza eventually reached the point of

diminishing marginal utility

The term ___________________ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit.

diminishing marginal utility

The term _________________ refers to the additional utility provided by one additional unit of consumption.

marginal utility

When an economist talks about total utility, he is talking about

the satisfaction that results from consumer choices.

The theory of consumer choice assumes that consumers attempt to maximize

total utility.

Kim has $24 per week in her entertainment budget. She splits her time between going to the movies and yoga classes. Each movie costs $9 while each yoga class costs $5. The total utility from each of these activities is set out in the table below. What is Kim's total utility maximizing point?

1 movie, 3 yoga classes

Refer to the table shown. The marginal utility for the second unit is

12 utils.

Suppose that the total utility from consuming one unit of good Z is 100 utils, the total utility from consuming two units of good Z is 150 utils, and the total utility from consuming three units of good Z is 170 utils. The marginal utility received from consuming the third unit of good Z is

20 utils.

Refer to the table shown. The total utility for two oranges is

36 utils.

Suppose Will's total untility after consuming one banana is 50 and it is 92 after consuming two bananas. What is the marginal utility of the second banana?

42

How does the U.S. Bureau of Labor Statistics gather information with regard to the typical consumption choices of Americans?

Consumer Expenditure Survey

Jay and Jen are married with two children. They are preparing a household budget for the coming year. Based on statistical information for American households, approximately what portion of this family's annual consumption will most likely be budgeted for food and vehicle expenses?

one-third

A util is an artificial construct used as a means of measuring the

satisfaction one receives from the consumption of a good

Economists are able to determine total utility by:

summing up the marginal utilities of each unit consumed