Demand

You are eating at an All-You-Can-Eat buffet. What is your marginal utility of the last morsel of food you swallow (assume there are no other costs except what you paid for the buffet).

0

Jeff is willing to pay $3 for the first cup of coffee; $2 for the second cup; $1 for the third; $0.50 for the fourth and nothing for the fifth cup. If coffee sells for $1.25, what is Jeff's consumer's surplus?

2.50

Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Dusty can buy a maximum of _____ loaves of bread or a maximum of _____ jars of peanut butter.

20; 10

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Casey can buy a maximum of _____ pounds of fish or a maximum of _____ pounds of shrimp.

50; 30

Ms. A owns a beautiful turn of the century house in University City. She would be willing to pay as much as $300,000 for it, but she got a deal and was able to buy it for $225,000. What is Ms. A's consumer's surplus?

75000

Suppose you are a government analyst and you think beans (as in legumes) are particularly nourishing. You decide to subsidize beans in order to encourage people to eat more of them. (When the government subsidizes an item, consumers pay a lower price.) After you successfully lower bean prices, you notice that consumption of beans has fallen. What went wrong?

The income effect caused people's real income to rise so they purchased less of what they considered to be inferior goods.

Angel's marginal utility for playing pool is 10 after playing 5 games. Angel's marginal utility for bowling is 6 after 3 games. If both pool and bowling cost $1 a game, to maximize his utility Angel should

bowl less and play pool more.

It is impossible for total utility to be _________ when marginal utility is __________

decreasing; positive

Sven likes to water ski, but can only water ski during the one week that he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's vacation convinced him that

even for activities he really enjoys, diminishing marginal utility eventually sets in.

Sven likes to water ski, but can only water ski during the one week that he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's total utility _______ with each hour that he skied.

increased

For two goods, A and B, MUA/PA = 25 and MUB/PB = 25. The consumer should

leave their choices as they are

asey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Assume both goods are normal goods. If Casey's income rises to $210, the rational spending rule would predict Casey would buy

more fish and more shrimp

Which of the following factors would influence a buyer's reservation price for a good or service?

social influence

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. If Casey's income rises to $210 Casey could buy a maximum of _____ pounds of fish or a maximum of _____ pounds of shrimp.

70; 42

ssume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. If Dusty's income falls to $20, the rational spending rule would predict that Dusty will buy (assume bread and peanut butter are normal goods)

less bread and less peanut butter.

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. If Casey's income falls to $120, the rational spending rule would predict Casey would buy

less fish and less shrimp

Assume diminishing marginal utility. If Terry gets maximum 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

Sven likes to water ski, but can only water ski during the one week that he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. On the fifth day of Sven's vacation, he had decided that another hour of skiing would yield

less utility than blueberry picking