Exam 2 (all) (11,
Type: G Topic: 6 E: 386-387 MI: 142-143 122. If the budget line shifts from BB to bb in the above diagram we can infer that the: A) price of Y has increased and the price of X has decreased. B) price of Y has decreased and the price of X has increased. C) prices of both X and Y have increased. D) prices of both X and Y have decreased.
A
Type: G Topic: 8 E: 390 MI: 146 147. In the above diagram: A) the consumer is indifferent between points A and B, but neither point maximizes his utility. B) the consumer is indifferent between points A and B and either point will maximize his utility. C) any combination of X and Y entailing more of Y and less of X than shown at B would be preferred. D) any combination of X and Y entailing more of X and less of Y than shown at A would be preferred.
A
Type: A Topic: 2 E: 373-375 MI: 129-131 32. If total utility is increasing, marginal utility: A) is positive, but may be either increasing or decreasing. B) must also be increasing. C) may be either positive or negative. D) will be increasing at an increasing rate.
A
Type: A Topic: 6 E: 386 MI: 142 113. An increase in money income shifts the consumer's: A) budget line to the right. C) indifference curves to the left. B) budget line to the left. D) indifference curves to the right.
A
Type: A Topic: 8 E: 389 MI: 145 155. Refer to the above diagram. If the budget line shifts from ab to ac the: A) price of K has increased. C) price of K has decreased. B) consumer's money income has fallen. D) price of J has increased.
A
Type: D Topic: 5 E: 380 MI: 136 80. The diamond-water paradox arises because: A) essential goods may be cheap while nonessential goods may be expensive. B) the marginal utility of certain products increases, rather than diminishes. C) essential goods are always higher priced than nonessential goods. D) we sometimes fail to use money as a standard of value.
A
Type: D Topic: 6 E: 386 MI: 142 107. Which of the following statements is not correct? A) A reduction in money income will shift the budget line to the right. B) A reduction in money income accompanied by an increase in product prices will necessarily shift the budget line to the left. C) An increase in product prices will shift the budget line to the left. D) An increase in money income will shift the budget line to the right.
A
Type: E Topic: 6 E: 386 MI: 142 111. In moving along a given budget line: A) the prices of both products and money income are assumed to be constant. B) each point on the line will be equally satisfactory to consumers. C) money income varies, but the prices of the two goods are constant. D) the prices of both products are assumed to vary, but money income is constant.
A
Type: G Topic: 6 E: 386 MI: 142 121. Suppose you have a money income of $10 all of which you spend on Coke and popcorn. In the above diagram, the prices of Coke and popcorn respectively are: A) $.50 and $1.00. B) $1.00 and $.50. C) $1.00 and $2.00. D) $.40 and $.50.
A
Type: G Topic: 6 E: 386 MI: 142 123. A budget line shows the: A) alternative combinations of two goods that a consumer can purchase with a given money income. B) alternative combinations of two goods that will yield the same level of total utility to a consumer. C) quantities of a particular good that a consumer will buy at various prices. D) ratio of money income to product price.
A
Type: G Topic: 8 E: 390 MI: 146 157. Refer to the above diagram. The equilibrium points shown in the diagram along with the price change that produced the shift of the budget line from ab to ac: A) are consistent with a downsloping demand curve for product K. B) imply that the consumer's money income has declined, but his or her real income has increased. C) imply consumer irrationality since the dearer product is being substituted for the cheaper product. D) suggest that K is an inferior good.
A
Type: G Topic: 8 E: 390 MI: 146 160. Refer to the above diagram. The budget line shift which moves the consumer's equilibrium position from point A to point B suggests: A) an increase in the quantity of Y demanded. C) a leftward shift in the demand curve for Y . B) a decrease in the quantity of Y demanded. D) a rightward shift in the demand curve for Y .
A
Type: T Topic: 2 E: 373-374 MI: 129-130 Status: New 15. Refer to the above data. The value for X is: A) 15. B) 5. C) 55. D) 10.
A
Type: T Topic: 2 E: 373-374 MI: 129-130 Status: New 17. Refer to the above data. The value for Z is: A) -5. B) + 5. C) -10. D) zero.
A
Type: T Topic: 4 E: 376 MI: 132 70. Refer to the above data. What level of total utility will the utility-maximizing consumer realize? A) 96 utils B) 108 utils C) 72 utils D) 142 utils
A
Type: A E: 389 MI: 145 Status: New 162. (Consider This) A topographical map shows successively higher equal-elevation lines, whereas an indifference map shows successively higher levels of total: A) utility. B) revenue. C) profit. D) cost.
A
. How are actual behaviors and response tendencies most often measured?
D. direct questioning
Which type of ad is designed primarily to elicit a positive affective response rather than to provide information or arguments?
D. emotional ad
Appeal characteristics represent _____ a message is communicated.
D. how
An advertisement for AT&T long distance telephone service split the screen in two and showed a person on each screen talking on the telephone. Below each person, there was a running total of the cost of the call. At the end of the commercial, the total cost on the AT&T side was lower than that for the Sprint side. This is an example of which type of ad?
E. comparative ad
Which type of ad directly compares the features or benefits of two or more brands?
E. comparative ad
Type: A E: 381 MI: 137 104. Noncash gift giving involves value loss when the marginal utility of the gift to the receiver is less than the product price.
True
hwo to
yes thats how
Simply presenting a brand to an individual on a large number of occasions might make the individual's attitude toward the brand more positive is known as _____.
A. mere exposure
Duane is attempting to determine consumers' attitudes toward his restaurant by asking them their beliefs about how his restaurant performs on several attributes, such as price, ambience, quality of the food, and friendliness of service. Consumers can rate his restaurant with a score of 1 to 7 for each of these attributes, with 7 being the highest. Duane adds up the scores to see how he performs, using the assumption that a higher total is better. At a basic level, which type of model is Duane using?
A. multiattribute attitude model
Dr. Rosenfeld is the doctor on Sunday House Call, a Sunday morning health program on the Fox News channel. Dr. Rosenfeld is highly esteemed in his field and provides up-to-date medical information for viewers. Sometimes he recommends specific products, and Valerie, a regular viewer of the program, trusts what he says or recommends because he doesn't seem to have an apparent motive to mislead viewers. Which characteristic does Dr. Rosenfeld possess?
A. source credibility
Advertisements and packages for Kellogg's Smart Start breakfast cereal include the seal of the American Heart Association, indicating that it is a hearty-healthy choice. This seal can influence consumers to purchase this brand because the American Heart Association has a reputation of trustworthiness and expertise. The seal appearing on packages and in advertisements represents a _____.
A. third-party endorsement
Type: G Topic: 8 E: 389 MI: 145 144. Refer to the above diagram where xy is the relevant budget line and I1 , I2, and I3 are indifference curves. Point M : A) is the consumer's equilibrium position. B) is unobtainable. C) is inferior to point N . D) entails the highest attainable level of total utility.
B
158. Refer to the above diagram. Suppose the budget line shifts so that the consumer's equilibrium changes from point A to point B. This means that the: A) price of Y has increased. C) price of X has increased. B) price of Y has decreased. D) consumer's money income has increased.
B
Type: A Topic: 1 E: 372-373 MI: 128-129 6. If steak is a normal good and its price rises: A) the amount purchased may either increase or decrease depending on the relative importance of the income and substitution effects. B) both the income and substitution effects suggest that less will be purchased. C) the substitution effect suggests more will be purchased, but the income effect suggests less will be purchased. D) the income effect suggests more will be purchased, but the substitution effect suggests less will be purchased.
B
Type: A Topic: 5 E: 380 MI: 136 81. The diamond-water paradox occurs because: A) the price of a product is related to its total utility, not its marginal utility. B) the price of a product is related to its marginal utility, not its total utility. C) water is, in fact, very scarce in certain regions of the world. D) diamonds are more useful than water.
B
Type: A Topic: 6 E: 386 MI: 142 125. The slope of a budget line reflects the: A) elasticity of demand for the two products. C) amount of the consumer's income. B) price ratio of the two products. D) utility ratio of the two products.
B
Type: A Topic: 6 E: 386-387 MI: 142-143 112. Increases in product prices shift the consumer's: A) budget line to the right. C) indifference curves to the left. B) budget line to the left. D) indifference curves to the right.
B
Type: A Topic: 6 E: 387 MI: 143 114. A change in the slope of a budget line is solely the result of a change in: A) consumer preferences. C) money income. B) the price of one or both goods. D) the marginal rate of substitution.
B
Type: C Topic: 6 E: 386-387 MI: 142-143 120. The movement of the budget line from BB to bb in the above figure suggests that income has: A) increased and the price of X has decreased. B) fallen and the price of Y has increased. C) fallen and the price of X has decreased. D) decreased but there have been no price changes.
B
Type: D Topic: 6 E: 386 MI: 142 106. The budget line shows: A) the amount of product A that a consumer is willing to give up to obtain one more unit of product B. B) all possible combinations of two goods that can be purchased, given money income and the prices of the goods. C) all equilibrium points on an indifference map. D) all possible combinations of two goods that yield the same level of utility to the consumer.
B
Type: D Topic: 6 E: 386 MI: 142 124. Other things equal, an increase in a consumer's money income: A) shifts her indifference curves rightward because she can now satisfy more of her wants. B) shifts her budget line rightward because she can now purchase more of both products. C) will be subject to the substitution effect, but not the income effect. D) will not alter the location of consumer equilibrium.
B
Type: D Topic: 6 E: 386 MI: 142 126. If the price of A is $12 and the price of B is $3, the budget line tells us that a consumer in effect can trade: A) 12 units of A for 3 of B. C) 1 unit of A for 3 of B. B) 1 unit of A for 4 of B. D) 1 unit of B for 4 of A.
B
Type: D Topic: 7 E: 387 MI: 143 135. An indifference curve: A) may be either upsloping or downsloping, depending on whether the two products are complements or substitutes. B) is downsloping and convex to the origin. C) is upsloping and has a constant slope. D) is downsloping and concave to the origin.
B
Type: F Topic: 2 E: 373 MI: 129 Status: New 10. Utility: A) is synonymous with usefulness. C) is easy to quantify. B) is want-satisfying power. D) rarely varies from person to person.
B
Type: G Topic: 2 E: 374 MI: 130 27. Refer to the above diagram. The marginal utility of the third unit of X is: A) 5. B) 4. C) 2. D) 1.
B
Type: G Topic: 2 E: 374 MI: 130 31. Refer to the above diagram. Marginal utility: A) increases at an increasing rate. B) becomes zero at 4 units of output. C) is found by dividing total utility by the number of units purchased. D) cannot be calculated from the total utility information.
B
Type: G Topic: 6 E: 386 MI: 142 117. The budget line shift from ab to cd in the above figure is consistent with: A) decreases in the prices of both M and N . B) an increase in the price of M and a decrease in the price of N . C) a decrease in money income. D) an increase in money income.
B
Type: G Topic: 8 E: 389 MI: 145 145. Refer to the above diagram where xy is the relevant budget line and I1 , I2, and I3 are indifference curves. At point K: A) MUx = MUy. B) MRS = Px/Py. C) MRS = Py/Px. D) Px exceeds Py.
B
Type: G Topic: 8 E: 390 MI: 146 146. AA is Al's indifference curve and BB is Betty's. Al and Betty have the same budget line, LL. This information implies that: A) Al's demand for X is stronger than Betty's. B) Al's demand for Y is stronger than Betty's. C) Al and Betty have the same demand for both products. D) Al will buy some of X, but Betty will not.
B
Type: G Topic: 8 E: 390 MI: 146 159. Refer to the above diagram. The budget line shift that moves the consumer's equilibrium from point A to point B suggests: A) an increase in the demand for product X . C) no change in the demand for product X . B) a decrease in the demand for product X . D) that X is an inferior good.
B
Type: T Topic: 2 E: 373-374 MI: 129-130 Status: New 16. Refer to the above data. The value for W is: A) 15. B) 20. C) 25. D) 30.
B
Type: A Topic: 6 E: 386 MI: 142 131. Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line: A) is 5. B) is 1/5. C) is 4. D) is 20.
B
Which of the following statements adequately reflects the concept of attitude component consistency?
B. A change in one attitude component tends to produce related changes in the other components.
_____ refers to presenting one of two equivalent value outcomes either in positive or gain terms or in negative or loss terms.
B. Message framing
When considering consumers' ideal levels of performance on attributes when using a multiattribute attitude model, which attitude index is best?
A. 0
Nike has several models of athletic shoes, and most have high functionality. However, several models are also sleek looking and can actually make a fashion statement for the wearer as well as performing the functional aspects of the product. By going beyond the cognitive associations of functionality and attempting to tap consumers' affective reactions, Nike and other marketers are developing products with _____.
A. aesthetic appeal
Why are the SAM and adSAM measures effective across cultures?
A. because the pictorial representations don't require translation or alteration
Segmenting consumers on the basis of their most important attribute or attributes is called _____.
A. benefit segmentation
For years, American automobiles did not have the level of quality that foreign, particularly Japanese, automobiles had. However, that has changed, and most automobiles built in the United States have comparable or superior quality than imports. Consumers' attitudes are slow to change, however, and marketers must use which strategy to change the cognitive component of consumers' attitudes?
A. change beliefs
For which type of products can affect, emotions, and Aad play a role in more conscious, high-involvement settings?
B. hedonic products
Toyota offers a hybrid version of its popular Highlander mid-sized SUV. The advertising for this car features the positive benefits of owning a hybrid, but it fails to mention that the Hybrid is considerably more expensive than the conventional version of the model. This is an example of a(n) _____.
B. one-sided message
Advertisements or sales messages in which only one point of view is expressed are referred to as _____.
B. one-sided messages
Changing behavior prior to changing affect or cognition is based primarily on _____.
B. operant conditioning
. Which of the following occurs when a company provides financial support for an event such as the Olympics or a concert?
B. sponsorship
Online marketers attempt simulate "touch" by creating a(n) _____.
B. virtual direct experience
Type: A Topic: 6 E: 386-387 MI: 142-143 119. If money income increases and the prices of products A and B both increase, then the budget line: A) must shift to the right. B) must shift to the left. C) may shift either to the right or the left. D) will no longer be tangent to an indifference curve.
C
Type: A Topic: 7 E: 387 MI: 143 141. Indifference curve analysis: A) presumes, as does utility analysis, that satisfaction is numerically measurable. B) presumes, unlike utility analysis, that satisfaction is numerically measurable. C) presumes only that the consumer can say one combination of two goods yields more or less utility than some other combination. D) is in conflict with the idea of a downsloping demand curve.
C
Type: D Topic: 6 E: 386 MI: 142 116. The shift of the budget line from cd to ab in the above figure is consistent with: A) decreases in the prices of both M and N . B) an increase in the price of M and a decrease in the price of N . C) a decrease in money income. D) an increase in money income.
C
Type: G Topic: 6 E: 386-387 MI: 142-143 109. Refer to the budget line shown in the diagram above. Given the same money income, reductions in the prices of both products C and D will: A) shift the budget line outward on the horizontal axis, but leave it anchored at "10" on the vertical axis. B) shift the budget line to the left. C) shift the budget line to the right. D) have no effect on the budget line.
C
Type: G Topic: 8 E: 386 MI: 142 154. If a consumer chooses a combination of goods that lies inside of her budget line, the consumer: A) is maximizing utility. B) is spending in excess of her current income. C) could obtain more goods with her money income. D) has upsloping indifference curves.
C
40. Mrs. Green is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are $.60 per bottle and $.40 per bag respectively. It can be concluded that: A) the two commodities are substitute goods. B) Mrs. Green should spend more on pretzels and less on soda. C) Mrs. Green should spend more on soda and less on pretzels. D) Mrs. Green is buying soda and pretzels in the utility-maximizing amounts.
C
50. Assume MUc and MUd represent the marginal utility that a consumer gets from products C and D, the respective prices of which are Pc and P d. The consumer will increase his total utility from a specific money outlay by spending more on C and less on D if initially: A) MUd < MUc B) C) D) MUc > MUd
C
Type: A E: 382 MI: 138 91. (Last Word) Most people do not steal because: A) the marginal utilities of stolen goods diminish as more of them are obtained. B) the marginal utilities of stolen goods are negative. C) their marginal costs, including guilt costs, are too high. D) stolen goods can be sold only at deep discounts.
C
Type: A Topic: 2 E: 373-374 MI: 129-130 33. Where total utility is at a maximum, marginal utility is: A) negative. B) positive and increasing. C) zero. D) positive but decreasing.
C
Type: A Topic: 5 E: 380 MI: 136 78. Which of the following has been a significant factor in DVDs replacing video cassettes (VCs) in the retail home video market? A) DVDs are now less than one-half the price of VCs. B) A scarcity of production capacity has curtailed the manufacture of VCs. C) Most consumers perceive DVD sound and video reproduction to be of higher quality. D) The price of DVD players has increased dramatically.
C
Type: A Topic: 5 E: 381 MI: 137 85. Which of the following statements is correct? A) Both cash and noncash gift-giving cause value losses. B) Neither cash nor noncash gift-giving cause value losses. C) Noncash gift-giving create a value loss, but cash gifts do not. D) Cash gifts creates a value loss, but noncash gifts do not.
C
Type: A Topic: 5 E: 381 MI: 137 87. If you receive a gift whose market price is $20, but you consider it to be worth only $10, then: A) there is a $10 or 50 percent value gain. B) there may or may not be a value loss. C) there is a $10 or 50 percent value loss. D) you can be relatively certain the giver was a sibling or other close relative.
C
Type: A Topic: 6 E: 386 MI: 142 115. In drawing a budget line it is assumed that: A) consumer preferences are fixed. B) the prices of the two products are variable. C) money income is fixed. D) consumer willingness to substitute between the two products is fixed.
C
Type: A Topic: 7 E: 386-387 MI: 142-143 140. Which of the following is correct? A) Budget lines are linear and upsloping; indifference curves are downsloping and concave to the origin. B) Budget lines are linear and downsloping; indifference curves are downsloping and concave to the origin. C) Budget lines are linear and downsloping; indifference curves are downsloping and convex to the origin. D) Budget lines are downsloping and convex to the origin; indifference curves are linear and downsloping.
C
Type: A Topic: 7 E: 387 MI: 143 134. An indifference curve shows all: A) possible equilibrium positions on an indifference map. B) equilibrium combinations of two products that are obtainable with a given money income. C) combinations of two products yielding the same total utility to a consumer. D) possible combinations of two products that a consumer can purchase, given her income and the prices of the products.
C
Type: A Topic: 8 E: 388-389 MI: 144-145 142. Refer to the above diagram where xy is the relevant budget line and I1 , I2, and I3 are indifference curves. The equilibrium position for the consumer is at: A) any point on xy. B) point M. C) point K. D) point J.
C
Type: A Topic: 8 E: 388-389 MI: 144-145 149. Assume a diagram in which a budget line is imposed on an indifference map. A consumer will maximize her utility: A) at any point where the budget line and an indifference curve intersect. B) at either point where the budget line intersects the horizontal and vertical axes. C) where the budget line is tangent to an indifference curve. D) where the ratio of the two product prices equals the reciprocal of the consumer's income.
C
Type: A Topic: 8 E: 389 MI: 145 151. Refer to the above diagram in which the downsloping linear lines are budget lines and I1, I 2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 2, and 5 are such that: A) point 2 yields more utility than either 1 or 5. B) points 1 and 5 yield more utility than point 2. C) points 1, 2, and 5 yield equal amounts of utility. D) the levels of utility associated with these three points cannot be compared.
C
Type: D Topic: 1 E: 373 MI: 129 7. The substitution effect indicates that: A) a decline in money income will cause the consumer to buy more inferior goods and fewer superior goods. B) consumer equilibrium can only be achieved when the consumer is buying substitute goods. C) when the price of a product falls, the lower price will induce the consumer to buy more of that product at the expense of other products. D) when the price of a product falls, a consumer will be able to buy more of it with a specific money income.
C
Type: F E: 389 MI: 145 Status: New 161. (Consider This) The lines on a topographical map are analogous to a(n): A) series of demand curves. C) indifference map. B) series of supply curves. D) series of budget constraints.
C
Type: G Topic: 2 E: 374 MI: 130 28. Refer to the above diagram. The total utility yielded by 4 units of X is: A) 4. B) 15. C) 17. D) 18.
C
Type: G Topic: 6 E: 386 MI: 142 130. Edith is buying products X and Y with her money income. Suppose her budget line shifts rightward (outward). This might be the result of: A) the prices of X and Y increasing while her money income remains constant. B) her money income decreasing while the prices of X and Y remain constant. C) her money income increasing more than proportionately to increases in the prices of X and Y. D) none of the above.
C
Type: G Topic: 7 E: 387 MI: 143 133. At each point on an indifference curve: A) money income is the same. C) total utility is the same. B) the prices of the two products are the same. D) marginal utility is the same.
C
Type: G Topic: 8 E: 389 MI: 145 152. Refer to the above diagram in which the downsloping linear lines are budget lines and I1, I 2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 3, and 5 are such that: A) all three imply the same level of utility. B) 1 and 5 imply a higher level of utility than does 3. C) 3 implies a higher level of utility than does 1 or 5. D) the person is indifferent among the three combinations.
C
Type: G Topic: 8 E: 389 MI: 145 153. Refer to the above diagram in which the downsloping linear lines are budget lines and I1, I 2, and I3 comprise an indifference map. With respect to points 2, 3, and 4, we can say that: A) point 4 entails more utility than 3, but less than 2. B) point 4 entails more utility than 2, but less than 3. C) point 4 yields more utility than either 2 or 3. D) the levels of utility associated with these three points cannot be compared.
C
Which of the following statement is true regarding comparative advertising?
C. Audience characteristics, especially brand loyalty associated with the sponsoring brand, are important.
The owner of a local restaurant wants to enhance consumers' attitudes toward his restaurant by changing the affective component of their attitude. Which of the following is an appropriate approach to achieve this objective?
B. Use positive music in their advertisements so that over time consumers will transfer the positive affect associated with the music to the restaurant.
Which of the following is true regarding value-expressive versus utilitarian appeals?
B. Utilitarian appeals are most effective for functional products.
Janice and her mother were visiting an art gallery, and they were looking at modern art. When they came to one painting, Janice said, "I like that." When her mother asked her why she liked it, all she could say was, "I don't know, I just like it." Which component of attitude does this represent?
B. affective
SAM (Self-Assessment Manikin) is used to assess which component of attitude?
B. affective
Mitch likes Toyota automobiles because he thinks they have the highest reliability of all automobiles. His belief about Toyota's reliability represents which component of Mitch's attitude?
B. cognitive
Which component of attitudes consists of a consumer's beliefs about an object?
B. cognitive
Attitude components tend to be _____.
B. consistent
_____ is the first strategy a loyal consumer uses when their favorite brand is attacked with negative information.
B. discrediting
A learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object is known as a(n) _____.
C. attitude
Caleb learned from his parents that littering was bad, so when he sees someone doing it, he forms an unfavorable impression of that person. Caleb's learned predisposition to dislike someone who litters represents his _____.
C. attitude
Which component of attitude represents one's tendency to respond in a certain manner toward an object or activity?
C. behavioral
Marketers must promote _____ rather than _____, especially for less knowledgeable consumers and for complex products.
C. benefits, features
Addison is a brand manager and wants consumers to form attitudes that are strong, resistant to counterpersuasion attempts, more accessible from memory, and more predictive of behavior. Which route of the elaboration likelihood model should he encourage consumers to take?
C. central route
Carissa is highly involved is a purchase decision for a new car. She has searched the Internet, visited car dealerships, talked to friends and family, and paid attention to advertisements. According to the elaboration likelihood model, by which route is Carissa likely to be persuaded?
C. central route
The elaboration likelihood model posits two routes to persuasion, which are the _____.
C. central route and peripheral route
A loyal consumer will often use _____ to protect their brand by reducing the importance they put on a given attribute.
C. discounting
Which of the following is a theory about how attitudes are formed and changed under varying conditions of involvement?
C. elaboration likelihood model
A long-running television commercial for Dial soap would show an individual in various situations with other people (e.g., car pool or elevator). This individual would join the others and look around, appearing to be in discomfort. Then a voice over would say, "Aren't you glad you used Dial...don't you wish everyone did?" Which type of appeal does this illustrate?
C. fear appeal
Which type of appeal uses the threat of negative (unpleasant) consequence if attitudes or behaviors are not altered?
C. fear appeals
Which of the following statements is FALSE regarding humorous appeals?
C. Humorous ads are low risk because they tend to translate well across situations and cultures.
Which of the following is used to understand a consumer's cognitive component of attitude?
C. multiattribute attitude model
Tony the Tiger, the Jolly Green Giant, and the Aflac duck are examples of _____.
C. spokescharacters
How does mere exposure enhance attitudes?
C. through enhanced familiarity
For years, L'Oreal hair color would say in their ad that L'Oreal is "expensive, but you're worth it." This is an example of which type of advertisement?
C. two-sided message
Which type of advertisement or sales presentation presents both good and bad points?
C. two-sided message
Which type of appeal involves informing the consumer of one or more functional benefits that are important to the target market?
C. utilitarian appeal
Which type of appeal attempts to build a personality for the product or create an image of the product user?
C. value-expressive appeal
In an attempt to alter consumers' cognitive component of their attitude toward Pepsi brand of cola, a freshness date was added on the cans. Pepsi wanted consumers to consider this attribute that was never a consideration before. Pepsi was using which strategy to alter the cognitive structure of a consumer's attitude?
C. add beliefs
Feelings or emotional reactions to an object reflect the _____ component of an attitude.
C. affective
Kimberly-Clark is interested in mothers' emotional reactions to their Huggies brand of disposable diapers, which usually have popular characters or cute designs printed on them. Which component of attitude is Kimberly-Clark interested in?
C. affective
Madeline has a(n) _____ toward Regular Coke, whereby she simultaneously really likes the taste but also is really negative about the brand because it has high calories.
C. ambivalent attitude
Type: A Topic: 4 E: 379 MI: 135 66. What do the income effect, the substitution effect, and diminishing marginal utility have in common? A) All are required to explain the utility-maximizing position of a consumer. B) They are all empirically measurable. C) They all help explain the upsloping supply curve. D) They all help explain the downsloping demand curve.
D
Type: A Topic: 6 E: 386-387 MI: 142-143 127. Assume the price of product Y (the quantity of which is plotted on the vertical axis) is initially $15 and the price of X (the quantity of which is plotted on the horizontal axis) is initially $3. Assume money income is initially $60. If the prices of Y and X now increase to $30 and $6 respectively and money income increases to $120, then the budget line will: A) shift rightward and become steeper. C) shift rightward, but its slope will not change. B) shift rightward and become flatter. D) be unchanged.
D
Type: D Topic: 7 E: 388 MI: 144 136. An indifference map implies that: A) money income is constant, but the prices of the two products vary directly with the quantities purchased. B) the two products under consideration are perfectly substitutable for one another. C) a consumer is better off to be at some point high on a given curve as opposed to a point low on the same curve. D) curves farther from the origin yield higher levels of total utility.
D
Type: T Topic: 4 E: 376 MI: 132 71. Refer to the above data. If the price of X decreases to $2, then the utility-maximizing combination of the two products is: A) 2 of X and 5 of Y. B) 4 of X and 6 of Y. C) 6 of X and 3 of Y. D) 4 of X and 5 of Y.
D
1. The income effect indicates that: A) a rise in money income will cause consumers to buy smaller quantities of normal goods. B) when the price of a product falls, the lower price will induce the consumer to buy more of that product now that it is relatively cheaper. C) consumers should substitute among various products until the marginal utility from the last unit of each product purchased is the same. D) when the price of a product falls, a consumer will be able to buy more of it with a specific money income.
D
Type: A Topic: 2 E: 373 MI: 129 Status: New 13. The ability of a good or service to satisfy wants is called: A) utility maximization. B) opportunity cost. C) revenue potential. D) utility.
D
Type: A Topic: 6 E: 386 MI: 142 108. Refer to the budget line shown in the diagram above. If the consumer's money income is $20, the: A) prices of C and D cannot be determined. B) price of C is $2 and the price of D is $4. C) consumer can obtain a combination of 5 units of both C and D. D) price of C is $4 and the price of D is $2.
D
Type: A Topic: 6 E: 386 MI: 142 129. Suppose Elroy's budget line is as shown on the above diagram. If his tastes change in favor of Coke and against popcorn, the budget line will: A) become steeper. B) become flatter. C) shift rightward. D) be unaffected.
D
Type: A Topic: 6 E: 386-387 MI: 142-143 128. Assume initially that the price of X (measured on the horizontal axis) is $9 and the price of Y (measured on the vertical axis) is $4. If the price of X now declines to $6, the budget line will: A) be unaffected. C) shift inward on the horizontal axis. B) shift outward on the vertical axis. D) shift outward on the horizontal axis.
D
Type: A Topic: 7 E: 387 MI: 143 132. The indifference curve in the above diagram yields Juan 100 units of utility. If Juan's money income were to increase by 20 percent, the indifference curve would: A) shift leftward. B) shift rightward. C) become steeper. D) not be affected.
D
Type: A Topic: 7 E: 387 MI: 143 137. The marginal rate of substitution measures the: A) magnitude of the substitution effect. B) total utility received by a consumer when equilibrium is achieved. C) extra utility that a consumer derives from successive units of a product. D) consumer's willingness to substitute one product for another so that total utility will remain constant.
D
Type: A Topic: 7 E: 387 MI: 143 139. Which of the following is not characteristic of indifference curves? A) They are downsloping. B) They are convex to the origin. C) Their slope diminishes as we move from northwest to southeast on a given curve. D) Curves closer to the origin reflect higher levels of total utility.
D
Type: A Topic: 8 E: 388-389 MI: 144-145 150. Indifference curve analysis indicates that consumer equilibrium exists: A) where an indifference curve has a slope of 1. B) where any two indifference curves intersect. C) at any point where the budget line intersects an indifference curve. D) where the budget line touches the highest possible indifference curve.
D
Type: D Topic: 7 E: 387 MI: 143 138. The marginal rate of substitution: A) may increase or decrease on a given indifference curve, depending on whether the substitution or the income effect is dominant. B) increases as one moves southeast along an indifference curve. C) is constant at all points on the budget line. D) declines as one moves southeast along an indifference curve.
D
Type: G Topic: 6 E: 386 MI: 142 118. Any combination of goods lying outside of the budget line: A) implies that the consumer is not spending all his income. B) yields less utility than any point on the budget line. C) yields less utility than any point inside the budget line. D) is unobtainable, given the consumer's income.
D
Type: G Topic: 6 E: 387 MI: 143 110. Refer to the budget line shown in the diagram above. The absolute value of the slope of the budget line is: A) MUC/MUD. B) one-half. C) PD/PC. D) PC/PD.
D
Type: G Topic: 8 E: 386 MI: 142 148. If a consumer is initially in equilibrium, an increase in money income will: A) move him to a new equilibrium on a lower indifference curve. B) make his indifference curves steeper, but will not alter the equilibrium position. C) have no effect on the equilibrium position because product prices have not changed. D) move him to a new equilibrium on a higher indifference curve.
D
Type: G Topic: 8 E: 388-389 MI: 144-145 143. Refer to the above diagram where xy is the relevant budget line and I1 , I2, and I3 are indifference curves. If the consumer is initially at point L, he or she should: A) strive for point N by obtaining a larger money income. B) purchase more of X and less of Y . C) remain at that point to maximize utility. D) purchase more of Y and less of X .
D
Type: G Topic: 8 E: 390 MI: 146 156. Refer to the above diagram. If the budget line shifts from ab to ac the: A) consumer's level of total utility will increase. B) consumer will purchase more of both J and K. C) consumer will purchase less of both J and K. D) consumer will purchase more of J and less of K.
D
Type: T Topic: 2 E: 373-374 MI: 129-130 Status: New 14. Refer to the above data. The value for Y is: A) 25. B) 30. C) 40. D) 45.
D
Type: T Topic: 2 E: 373-374 MI: 129-130 Status: New 19. Refer to above data. Marginal utility becomes negative beginning with the: A) first unit. B) second unit. C) third unit. D) fourth unit.
D
Type: T Topic: 3 E: 377 MI: 133 43. Refer to the above data. If the consumer's money income were cut from $52 to $28, she would maximize her satisfaction by purchasing: A) 3 units of J and 3 units of K. C) 4 units of J and 1 unit of K. B) 1 unit of J and 3 units of K. D) 2 units of J and 3 units of K.
D
When the SPCA presents facts to counter untrue myths, they are dealing most closely with the _____ component of attitudes.
D. cognitive
Which of the following is an individual factor that can influence attitude change?
D. consumer knowledge
_____ is used by loyal consumers, whereby they "seal off" the negative information as a way to quarantine.
D. containment
Which of the following is NOT a reason why celebrity sources are effective?
D. Celebrities are physically attractive, and research has shown that individuals will agree with a physically attractive person regardless of the message or their own initial attitude.
Dana is watching television when a commercial for a brand of bathroom cleaner comes on. She is not very interested in the product category, but the ad was entertaining and made her laugh. As a result, she had a positive attitude toward the brand of cleaner advertised. According to the elaboration likelihood model, which route to persuasion influenced Dana?
D. peripheral route
Anne appears in a television commercial for a local chiropractor. She tells the audience how she suffered from migraine headaches several times a month. However, once she started treatment at this particular chiropractor, her headaches disappeared. She claimed, "I kept expecting them to come back, but they didn't. I have a whole new lease on life, thanks to Peavy Chiropractic!" Which type of ad is this?
D. testimonial ad
In which type of ad does a person, generally a typical member of the target market, recount his or her successful use of the product, service, or idea?
D. testimonial ad
An advertisement for the Honda Civic Hybrid featured gas mileage in the subheading (49 city/51 highway). The copy also noted that owners of this automobile may be eligible for a clean-fuel tax deduction. At the time this ad appeared, gas was over $3.00 per gallon, which made the information important to consumers. This is an example of which type of appeal?
D. utilitarian appeal
Instead of featuring any functional benefits of the product or brand in ads for the iPod, this product was introduced by showing a silhouette of a person dancing with the white earbudsr and holding a white iPod MP3 player. Which type of advertising appeal does this illustrate?
D. value-expressive appeal
Which of the following do marketers need to be concerned about with respect to using celebrities as company spokespersons?
E. a, b, and c
Which of the following is an approach used by marketers to increase consumers' affect toward their brand?
E. a, b, and c
. Generally speaking, compared to attitudes formed under the peripheral route, attitudes formed under the central route tend to be _____.
E. all of the above
. Which of the following can be a component of a multiattribute model?
E. all of the above
Spokescharacters can be _____.
E. all of the above
Which of the following is a common technique for inducing trial behavior?
E. all of the above
Which of the following is a factor that may account for inconsistencies between measures of beliefs and feelings and observations of behavior?
E. all of the above
Which of the following is a strategy for altering the cognitive component of a consumer's attitude?
E. all of the above
Which of the following is NOT a way emotional ads may enhance persuasion?
E. all of the above are ways emotional ads may enhance persuasion
The simplest form of message framing where only a single attribute is the focus of the frame is known as _____.
E. attribute framing
An approach to measuring the importance of attitude components that requires consumers to allocate 100 points among the components such that the distribution of the points reflects the relative importance of the component is _____.
E. none of the above
Type: A E: 373 MI: 129 95. The substitution effect suggests that, when consumers judge product quality by price, they will substitute high-priced products for low-priced products.
False
Type: A E: 373-374 MI: 129-130 94. If marginal utility is diminishing, total utility must also be declining.
False
Type: A E: 376 MI: 132 97. A rational consumer will cease purchasing a product at that quantity where marginal utility begins to diminish.
False
Type: A E: 379 MI: 135 102. The consumer demand curve for a product is downsloping because marginal utility is constant when price declines.
False
Type: A E: 379 MI: 135 105. When a consumer shifts purchases from X to Y, the marginal utility of X falls and the marginal utility of Y rises.
False
Type: A E: 380 MI: 136 103. Water has greater marginal utility than diamonds, yet diamonds have greater total utility than water.
False
Type: A E: 386 MI: 142 174. The lower the consumer's income, the higher his or her budget line.
False
Type: A E: 387 MI: 143 171. Indifference analysis assumes that utility is numerically measurable.
False
Type: A E: 388 MI: 144 169. It is possible for a consumer's indifference curves to intersect.
False
Type: A E: 388 MI: 144 172. As a consumer moves down a given indifference curve, his or her total utility will diminish.
False
Type: D E: 372 MI: 128 93. The income effect explains an exception to the law of demand.
False
Type: D E: 373 MI: 129 98. Marginal utility is total utility divided by the number of units consumed.
False
Type: G E: 387 MI: 143 163. Indifference curves are linear and budget lines are convex to the origin.
False
Type: A E: 372-373 MI: 128-129 96. When the price of a product falls, the income effect induces the consumer to purchase more of it while the substitution effect prompts her to buy less.
False
Which of the following is NOT a factor accounting for inconsistencies between measures of beliefs and feelings and observations of behavior?
D. failure to consider negative reactions
Quaker Oats contains zero milligrams of sodium. This is an example of what type of belief?
D. feature belief
Type: A E: 390 MI: 146 173. Marginal utility theory and indifference curve analysis are both
True
Type: A E: 376 MI: 132 100. The limited money income of consumers results in a so-called budget constraint.
True
Type: A E: 376 MI: 132 101. When a consumer is maximizing total utility, he or she cannot increase total utility by reallocating expenditures among different products.
True
Type: A E: 386-387 MI: 142-143 165. In drawing a particular budget line, money income and the prices of the two products are fixed.
True
Type: A E: 386-387 MI: 142-143 166. With fixed money income, an increase in the price of one good and a decrease in the price of the other will cause the new budget line to intersect the original budget line.
True
Type: A E: 387 MI: 143 168. Each point on a single indifference curve reflects the same level of total utility for a consumer.
True
Type: A E: 387-388 MI: 143-144 167. In moving northeasterly from the origin we encounter indifference curves that reflect higher and higher levels of total utility.
True
Type: A E: 388 MI: 144 170. A rational consumer will try to achieve the highest indifference curve that his or her income will allow.
True
Type: A E: 388-389 MI: 144-145 164. Graphically, the consumer maximizes total utility where the budget line is tangent to an indifference curve.
True
Type: F E: 373-374 MI: 129-130 99. When total utility is at a maximum, marginal utility is zero.
True
Type: T Topic: 4 E: 379 MI: 135 72. Refer to the above data. Which of the following represents the demand schedule for X?
B
The source of a communication represents _____.
B. "who" delivers the message
Which of the following is FALSE regarding the central route to persuasion in the elaboration likelihood model?
D. Persuasion operates through classical conditioning.
_____ consists of trustworthiness and expertise.
D. Source credibility
wow
i know right
Type: A Topic: 3 E: 376 MI: 132 57. Refer to the above data. What level of total utility does the consumer realize in equilibrium? A) 87 utils B) 114 utils C) 51 utils D) 58 utils
C
Type: A Topic: 1 E: 372-373 MI: 128-129 2. If the price of normal good X rises, the income: A) and substitution effects will both induce the consumer to buy less of X. B) and substitution effects will both induce the consumer to buy more of X. C) effect will induce the consumer to buy more of X and the substitution effect will induce him to buy less. D) effect will induce the consumer to buy less of X and the substitution will induce him to buy more.
A
Type: A E: 382 MI: 138 90. (Last Word) Theft and burglary: A) can be viewed as attempts to maximize utility, given certain marginal costs and marginal benefits. B) are examples of irrational behavior. C) are applications of the law of increasing opportunity costs. D) are examples of noneconomic behavior.
A
Type: A Topic: 1 E: 372 MI: 128 4. A fall in the price of a good increases the real income or purchasing power of consumers so that they are able to buy more of the product. This statement best describes: A) the income effect. B) a complementary good. C) the substitution effect. D) an inferior good.
A
Type: A Topic: 1 E: 372-373 MI: 128-129 5. Which of the following is correct? When the price of normal good Z falls: A) both income and substitution effects cause the consumer to buy more. B) both income and substitution effects cause the consumer to buy less. C) the income effect causes the consumer to buy less, but the substitution effect causes her to buy more. D) the income effect causes the consumer to buy more, but the substitution effect causes her to buy less.
A
Type: A Topic: 1 E: 372-373 MI: 128-129 9. Suppose that Jean normally orders three tacos, but on seeing that their price has gone up, decides to buy only two. Jean's decision is best explained by: A) income and substitution effects. C) the principle of comparative advantage. B) the law of supply. D) the law of increasing opportunity costs.
A
Type: A Topic: 3 E: 377 MI: 133 46. Suppose you have a limited money income and you are purchasing products A and B whose prices happen to be the same. To maximize your utility you should purchase A and B in such amounts that: A) their marginal utilities are the same. B) their total utilities are the same. C) their marginal and total utilities are proportionate. D) the income and substitution effects associated with each are equal.
A
Type: A Topic: 3 E: 378 MI: 134 51. In purchasing products A and B, a consumer is in equilibrium when: A) MUa/Pa = MUb/Pb B) MUa/Pb = MUb/Pa C) MUa - MUb = Pa/Pb D) MUa × Pa = MUb × Pb
A
Type: A Topic: 3 E: 378 MI: 134 52. A consumer who has a limited budget will maximize utility or satisfaction when the: A) ratios of the marginal utility of each product purchased divided by its price are equal. B) total utility derived from each product purchased is the same. C) marginal utility of each product purchased is the same. D) price of each product purchased is the same.
A
Type: A Topic: 3 E: 378 MI: 134 53. Mr. Chan has an income of $20 that he is spending on donuts and cheese in such amounts that he derives 25 utils of satisfaction from the donuts and 25 utils of satisfaction from the cheese. On the basis of this information we: A) cannot say whether or not Chan is buying donuts and cheese in equilibrium amounts. B) can say that Chan should buy more cheese and fewer donuts. C) can say that Chan should buy more donuts and less cheese. D) can say that Chan is buying the utility-maximizing amounts of donuts and cheese.
A
Type: A Topic: 5 E: 380-381 MI: 136-137 76. In introducing the opportunity cost of time into the theory of consumer behavior we find that, all else equal: A) one should consume less of time-intensive goods. B) one should consume more of time-intensive goods. C) the consumer's equilibrium position is not altered. D) the marginal utility derived from each product must be multiplied by consumption time in determining equilibrium.
A
Type: D Topic: 2 E: 373 MI: 129 25. Utility refers to the: A) satisfaction that a consumer derives from a good or service. B) rate of decline in a product demand curve. C) relative scarcity of a product. D) usefulness of a product.
A
Type: D Topic: 3 E: 376 MI: 132 37. The theory of consumer behavior assumes that : A) consumers behave rationally, maximizing their satisfactions. B) consumers have unlimited money incomes. C) consumers do not know how much marginal utility they obtain from succesive units of various products. D) marginal utility is constant.
A
Type: A Topic: 3 E: 377 MI: 133 44. Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 5 and MUb/Pb = 8. Ben should purchase: A) more of A and less of B. C) more of both A and B. B) more of B and less of A. D) less of both A and B.
B
Type: A Topic: 5 E: 381 MI: 137 84. Most economists contend that: A) noncash transfers are more efficient than cash transfers. B) noncash transfers are less efficient than cash transfers. C) noncash and cash transfers are equally efficient. D) government can assess consumer preferences better than can consumers themselves.
B
Type: D Topic: 2 E: 375 MI: 131 21. The law of diminishing marginal utility states that: A) total utility is maximized when consumers obtain the same amount of utility per unit of each product consumed. B) beyond some point additional units of a product will yield less and less extra satisfaction to a consumer. C) price must be lowered to induce firms to supply more of a product. D) it will take larger and larger amounts of resources beyond some point to produce successive units of a product.
B
Type: D Topic: 3 E: 376 MI: 132 60. The theory of consumer behavior assumes that consumers attempt to maximize: A) the difference between total and marginal utility. B) total utility. C) average utility. D) marginal utility.
B
Type: G Topic: 4 E: 378-379 MI: 134-135 74. Refer to the above 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? A) D1 B) D2 C) D3 D) D4
B
Type: A Topic: 1 E: 373 MI: 129 3. If the price of a product falls, that product becomes cheaper and people will want to purchase more of it in place of other goods. This statement best describes: A) the income effect. B) the substitution effect. C) a complementary good. D) an inferior good.
B
Type: A Topic: 2 E: 375 MI: 131 23. If the price of product X rises, then the resulting decline in the amount purchased will: A) necessarily increase the consumer's total utility from his total purchases. B) increase the marginal utility of this good. C) increase the total utility from purchases of this good. D) reduce the marginal utility of this good.
B
Type: A Topic: 3 E: 376 MI: 132 38. To maximize utility a consumer should allocate money income so that the: A) elasticity of demand on all products purchased is the same. B) marginal utility obtained from the last dollar spent on each product is the same. C) total utility derived from each product consumed is the same. D) marginal utility of the last unit of each product consumed is the same.
B
Type: A Topic: 3 E: 376 MI: 132 58. An increase in the price of product A will: A) increase the marginal utility per dollar spent on A. B) decrease the marginal utility per dollar spent on A. C) not affect the marginal utility per dollar spent on A. D) cause utility-maximizing consumers to buy more of A.
B
Type: A Topic: 3 E: 376-377 MI: 132-133 61. When a consumer is maximizing total utility, A) the average utility from each dollar spent is the same. B) total utility cannot be increased by reallocating expenditures among various products. C) the total utility obtainable from each product is at a maximum. D) the marginal utility of the last unit of each product purchased is zero.
B
Type: A Topic: 3 E: 376-377 MI: 132-133 62. When a consumer shifts purchases from product X to product Y the marginal utility of: A) X falls and the marginal utility of Y rises. C) both X and Y rises. B) X rises and the marginal utility of Y falls. D) both X and Y falls.
B
Type: A Topic: 3 E: 377 MI: 133 45. The marginal utility of the last unit of A consumed is 12 and the marginal utility of the last unit of B consumed is 8. What set of prices for A and B respectively would be consistent with consumer equilibrium? A) $4 and $6 B) $6 and $4 C) $8 and $12 D) $16 and $9
B
Type: A Topic: 3 E: 378 MI: 134 47. A consumer is maximizing her utility with a particular money income when: A) the total utility derived from each product consumed is the same. B) MUa/Pa = MUb/Pb = MUc/Pc = ... = MUn/Pn. C) MUa = MUb = MUc = ... = MUn. D) Pa = Pb = Pc = ... = Pn.
B
Type: A Topic: 3 E: 378 MI: 134 54. If MUa/Pa = 100/$35 = MUb/Pb = 300/? = MUc/Pc = 400/?, the prices of products b and c in consumer equilibrium: A) cannot be determined from the information given. B) are $105 and $140 respectively. C) are $105 and $175 respectively. D) are $100 and $200 respectively.
B
Type: A Topic: 4 E: 379 MI: 135 67. A consumer's demand curve for a product is downsloping because: A) total utility falls below marginal utility as more of a product is consumed. B) marginal utility diminishes as more of a product is consumed. C) time becomes less valuable as more of a product is consumed. D) the income and substitution effects precisely offset each other.
B
Type: A Topic: 5 E: 380 MI: 136 79. Consumer demand for DVDs has increased over time because the price of DVD players has: A) decreased, and DVD players and video cassette players are substitute goods. B) decreased, and DVD players and video cassette players are complementary goods. C) increased, and DVD players and video cassette players are substitute goods. D) increased, and DVD players and video cassette players are complementary goods.
B
Type: A Topic: 5 E: 380 MI: 136 82. "Essential" water is cheaper than "nonessential" diamonds because: A) new industrial uses for diamonds have been discovered. B) the supply of water is great relative to demand and the supply of diamonds is small relative to demand. C) although the total utility of diamonds is greater, their marginal utility is small. D) the supply of diamonds is great relative to demand and the supply of water is small relative to demand.
B
Type: A Topic: 5 E: 381 MI: 137 86. Noncash gifts: A) increase the utility of recipients by introducing them to products they have not consumed before. B) reduce recipient utility relative to a cash gift because noncash gifts often fail to match recipient preferences. C) entail as much utility as do cash gifts. D) increase the utility of recipients because many people are uncertain of their own preferences.
B
Type: D Topic: 2 E: 373 MI: 129 24. Marginal utility is the: A) sensitivity of consumer purchases of a good to changes in the price of that good. B) change in total utility obtained by consuming one more unit of a good. C) change in total utility obtained by consuming another unit of a good divided by the change in the price of that good. D) total utility associated with the consumption of a certain number of units of a good divided by the number of units consumed.
B
Type: A E: 375 MI: 131 Status: New 89. (Consider This) Unlike newspaper dispensing devices, soft drink dispensing machines do not permit people to take more than one can or bottle with each payment. The reason is that the: A) opportunity cost of additional cans or bottles of soft drink increase very rapidly. B) marginal utility of extra soft drink cans or bottles declines slowly, particularly because they are storable and can be consumed later. C) marginal utility of extra soft drink cans or bottles declines quite rapidly. D) opportunity cost of additional cans or bottles of soft drink increase very slowly.
B
Type: A Topic: 2 E: 373 MI: 129 26. Total utility may be determined by: A) multiplying the marginal utility of the last unit consumed by the number of units consumed. B) summing the marginal utilities of each unit consumed. C) multiplying the marginal utility of the last unit consumed by product price. D) multiplying the marginal utility of the first unit consumed by the number of units consumed.
B
Type: A Topic: 2 E: 373-374 MI: 129-130 35. Which of the following is correct? A) There is no firm mathematical relationship between marginal utility and total utility. B) Total utility is equal to the change in marginal utility from consuming an additional unit of a product. C) If marginal utility is diminishing and is a positive amount, total utility will increase. D) If marginal utility is diminishing, total utility must also be diminishing.
C
Type: A Topic: 2 E: 373-374 MI: 129-130 Status: New 12. Brenda says, "You would have to pay me $50 to attend that pro wrestling event." For Brenda, the marginal utility of the event is: A) zero. B) positive, but declines rapidly. C) negative. D) positive, but less than the ticket price.
C
Type: A Topic: 2 E: 374 MI: 130 22. 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: A) 26 units of utility. B) 6 units of utility. C) 8 units of utility. D) 38 units of utility.
C
Type: A Topic: 3 E: 376-377 MI: 132-133 49. If a rational consumer is in equilibrium, which of the following conditions will hold true? A) MUa = MUb = MUc = ... = MUn. B) The marginal utility of each good purchased will be zero. C) The marginal utility of the last dollar spent on each good purchased will be the same. D) The total utility obtained from each good purchased will be the same.
C
Type: A Topic: 3 E: 376-377 MI: 132-133 63. Sam decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Sam: A) is relatively unappreciative of the arts. B) obtains more marginal utility from the play than from the hockey game. C) has a higher "marginal utility to price ratio" for the hockey game than for the play. D) has recently attended several other Broadway plays.
C
Type: A Topic: 3 E: 377 MI: 133 59. Rosenbaum is purchasing products C and D in utility-maximizing amounts. If the price of C is $4 and the price of D is $2, then: A) the marginal utility of D is twice that of C. B) the marginal utility of D is the same as that of C. C) the marginal utility of C is twice that of D. D) the marginal utility of C is four times that of D.
C
Type: A Topic: 5 E: 380-381 MI: 136-137 75. Some modern theories of consumer behavior have: A) emphasized that consumption is basically an instantaneous act. B) contended that in the MUx/Px = MUy/Py equation MU is understated for time-intensive goods. C) introduced the opportunity cost of time as a component of product price. D) argued that inflationary expectations negate the theory of consumer behavior.
C
Type: D Topic: 2 E: 373 MI: 129 20. A product has utility if it: A) takes more and more resources to produce successive units of it. B) violates the law of demand. C) satisfies consumer wants. D) is useful.
C
Type: F Topic: 2 E: 373 MI: 129 Status: New 11. Marginal utility can be: A) positive, but not negative. C) positive, negative, or zero. B) positive or negative, but not zero. D) decreasing, but not negative.
C
Type: G Topic: 2 E: 374 MI: 130 30. Refer to the above diagram. Total utility: A) increases so long as additional units of Y are purchased. B) becomes negative at 4 units. C) increases at a diminishing rate, reaches a maximum, and then declines. D) is maximized at 2 units.
C
Type: T Topic: 2 E: 375 MI: 131 Status: New 18. The above data illustrate the: A) law of comparative advantage. C) law of diminishing marginal utility. B) utility-maximizing rule. D) law of increasing opportunity costs.
C
Type: T Topic: 3 E: 376-377 MI: 132-133 41. Refer to the above data. If the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing: A) 2 units of J and 7 units of K. C) 4 units of J and 5 units of K. B) 5 units of J and 5 units of K. D) 6 units of J and 3 units of K.
C
Type: T Topic: 3 E: 376-377 MI: 132-133 42. Refer to the above data. What level of total utility is realized from the equilibrium combination of J and K determined in the previous question? A) 156 utils B) 124 utils C) 276 utils D) 36 utils
C
Type: T Topic: 4 E: 376-377 MI: 132-133 69. Refer to the above data. What quantities of X and Y should be purchased to maximize utility? A) 2 of X and 1 of Y B) 4 of X and 5 of Y C) 2 of X and 5 of Y D) 2 of X and 6 of Y
C
Type: T Topic: 4 E: 378 MI: 134 73. If the price of X and Y are $2 and $4 per unit, respectively, to maximize total utility this consumer should buy: A) 1 units of X and 1 units of Y. C) 1 units of X and 2 units of Y. B) 2 units of X and 2 units of Y. D) 5 units of X and no units of Y.
C
Type: A Topic: 1 E: 373 MI: 129 8. The substitution effect causes a consumer to buy less of a product when its price rises because the: A) consumer's real income has decreased. B) consumer's real income has increased. C) product is now less expensive compared to other products. D) product is now more expensive compared to other products.
D
Type: A Topic: 2 E: 373 MI: 129 34. Marginal utility: A) is equal to total utility divided by the number of units consumed. B) is equal to total utility if the demand curve is linear. C) increases as more of a product is consumed. D) diminishes as more of a product is consumed.
D
Type: A Topic: 3 E: 378 MI: 134 55. Assume that a consumer purchases products A, B, and C in quantities such that the last dollar spent on each yields the same marginal utility and the consumer's income is totally spent. We can conclude that: A) total utility is being minimized. C) marginal utility exceeds total utility. B) production costs are being minimized. D) total utility is being maximized.
D
Type: A E: 375 MI: 131 Status: New 88. (Consider This) Newspapers dispensing devices seemingly "trust" people to take only a single paper but the devices actually rely on the law of: A) supply. B) increasing opportunity costs. C) demand. D) diminishing marginal utility.
D
Type: A E: 382 MI: 138 92. (Last Word) All of the following would reduce property crime by increasing its "price," except: A) imposing greater penalties for those who are caught and convicted. B) using more sophisticated security systems. C) enhancing the legitimate earnings of potential criminals. D) cutting out the middlemen ("fences") by selling stolen goods via Internet auction sites.
D
Type: A Topic: 2 E: 373 MI: 129 36. Which of the following statements is correct? A) Utility and usefulness are synonymous. B) The marginal utility derived from successive units of a product tends to be similar for all consumers. C) Because utility is not measurable, the utility-maximizing rule provides no useful insights as to consumer behavior. D) A product may yield utility, but not be functionally useful.
D
Type: A Topic: 3 E: 376 MI: 132 64. Suppose that Dave normally orders two tacos, but on seeing they are on sale, decides to buy three. Dave's decision is best explained by the: A) law of increasing opportunity costs. C) principle of comparative advantage. B) law of supply. D) the principle of utility maximization.
D
Type: A Topic: 3 E: 376-377 MI: 132-133 48. Suppose that Ms. Spencer is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $2 and $4 respectively. The marginal utility of the last units of A and B are 16 and 24 respectively. These data suggest that Ms. Spencer: A) has preferences that are at odds with the principle of diminishing marginal utility. B) considers A and B to be complementary goods. C) should buy less A and more B. D) should buy less B and more A.
D
Type: A Topic: 3 E: 377 MI: 133 39. Suppose that MUx/Px exceeds MUy/Py. To maximize utility the consumer who is spending all her money income should buy: A) less of X only if its price rises. C) more of Y and less of X. B) more of Y only if its price rises. D) more of X and less of Y.
D
Type: A Topic: 3 E: 378 MI: 134 56. Refer to the above data. How many units of the two products will the consumer purchase? A) 3 of L and none of M B) 4 of L and 2 of M C) 3 of L and 5 of M D) 2 of L and 3 of M
D
Type: A Topic: 4 E: 378 MI: 134 68. The utility-maximizing rule: A) is inconsistent with the law of demand. C) implies a leftward shifting demand curve. B) implies a perfectly elastic demand curve. D) is consistent with the law of demand.
D
Type: A Topic: 4 E: 379 MI: 135 65. Diminishing marginal utility explains why: A) the income effect exceeds the substitution effect. B) the substitution effect exceeds the income effect. C) supply curves are upsloping. D) demand curves are downsloping.
D
Type: A Topic: 5 E: 381 MI: 137 83. The fact that most medical care purchases are financed through insurance: A) has no effect on health care consumption because aggregate costs are the same regardless of payment method. B) reduces the amount of health care consumed. C) has decreased health care costs and therefore reduced aggregate health care expenditures. D) increases the amount of health care consumed.
D
Type: G Topic: 2 E: 374 MI: 130 29. Refer to the above diagram. Total utility is at a maximum at _____ units of X. A) 2 B) 3 C) 4 D) 6
D
Type: C Topic: 5 E: 380-381 MI: 136-137 77. Assume you are spending your full budget and purchasing such amounts of X and Y that the marginal utility from the last units consumed is 40 and 20 utils respectively. Assume (a) the prices of X and Y are $8 and $4 respectively; (b) it takes 3 hours to consume a unit of X and 1 hour to consume a unit of Y; and (c) your time is worth $2 per hour. You A) should substitute X for Y until the marginal utility per hour is the same for both products. B) are consuming X and Y in the optimal amounts. C) should consume less of Y and more of X. D) should consume less of X and more of Y.
D
