Microecon In-class (11/15)

The ______ combination of goods is combination that yields the highest total utility given a consumer's income. a. affordable b. economical c. utility satiating d. optimal

d. optimal

Refer to the figure below. If Laura and Chris are the only two consumers in this market, then the market demand for hamburger will be 9 pounds per week when the price of hamburger is: a. $1.00 per pound b. $1.50 per pound c. $2.00 per pound d. $2.50 per pound

a. $1.00 per pound

During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. Your total utility ______ with the first three pies you ate. a. increased b. decreased c. stayed the same d. first increased than decreased

a. increased

The figure below shows a single consumer's demand for ice cream at the student union. The student union sells a total of 7,200 scoops of ice cream each week at a price of $2.00 per scoop. If every student who buys ice cream has the demand curve shown above, then there must be ______ students purchasing ice cream each week. a. 800 b. 1,200 c. 1,500 d. 2,000

b. 1,200

Suppose the market for shoes consists of three consumers. The table below shows the quantity demanded at various prices for each consumer: What is the market demand for shoes when the price is $50 a pair? a. 7 pairs b. 11 pairs c. 15 pairs d. It will depend on the quantity supplied when the price is $50 a pair.

b. 11 pairs

Refer to the figure below. The marginal utility of consuming the 2nd apple is: a. 10 b. 15 c. 20 d. 35

b. 15

Jamie's marginal utility from muffins and from doughnuts (in utils) is shown below. Jamie spends a total of $8 on muffins and/or doughnuts every morning. The price of each muffin is $2 and the price of each doughnut is $1. What is Jamie's optimal combination of muffins and doughnuts each day? a. 1 muffin, 6 doughnuts b. 2 muffins, 4 doughnuts c. 3 muffins, 2 doughnuts d. 4 muffins, zero doughnuts

b. 2 muffins, 4 doughnuts

Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demand by the three townspeople at various prices. When the price of a doughnut is 25 cents, what is the market demand for doughnuts? a. 9 doughnuts b. 13 doughnuts c. 16 doughnuts d. 20 doughnuts

c. 16 doughnuts

The figure below shows a single consumer's demand for ice cream at the student union. During a regular semester, there are 500 students on campus. Each student's weekly demand for ice cream is shown above. When the price of ice cream is $2.00 per scoop, those 500 students purchase a total of _____ scoops per week from the student union. a. 2,000 b. 2,500 c. 3,000 d. 5,000

c. 3,000

The figure below shows the demand curve for a product that can be sold only in whole-number amounts. At a price of $25 per unit, what would be the total consumer surplus in this market each day? a. $0 b. $5 c. $15 d. $30

d. $30

For two goods, A and B, the rational spending rule is expressed as: a. MUA = MUB. b. MUA * MUB = PA * PB. c. (MUA/PB) = (MUB/PA). d. (MUA/PA) = (MUB/PB).

d. (MUA/PA) = (MUB/PB).

Consumer surplus measures: a. the increase in a buyer's total utility when the buyer purchases additional units of a good. b. the difference between the quantity demanded and the quantity supplied at a given price. c. the difference between a buyer's marginal utility from consuming a product and the price actually paid. d. the difference between the most a buyer would be willing to pay for a product and the price actually paid.

d. the difference between the most a buyer would be willing to pay for a product and the price actually paid.

The tendency for consumers to purchase more of a good or service as its price falls is captured by: a. the law of supply. b. the law of increasing cost. c. the Low-Hanging Fruit Principle. d. the law of demand.

d. the law of demand.

If the marginal utility of the 3rd cup of coffee is 23 and the marginal utility of the 4th cup is 15, then: a. it is optimal for the consumer to have 3 cups of coffee. b. the price of a cup of coffee must be relatively low. c. it is optimal for the consumer to have 4 cups of coffee. d. there is evidence of diminishing marginal utility.

d. there is evidence of diminishing marginal utility.

Shelter for homeless people is an example of: a. a want. b. a need. c. something they can live without. d. something hard to find.

b. a need.

Taylor's marginal utility from watching movies and from eating out (in utils) is shown below. Taylor spends exactly $100 every month on these two forms of entertainment, and the price of each movie is $10 and the price of each dinner is $20. If Taylor watches 2 movies a month, Taylor will eat out ______ times per month, and have marginal utility per dollar of ______ from movies and a marginal utility per dollar of ______ from eating out. a. 3; 5; 6 b. 2; 5; 7 c. 4; 5; 5 d. 4; 4; 6

c. 4; 5; 5

Suppose that each week Henry buys 12 peaches and 3 apples at his local farmer's market. Both kinds of fruit cost $1 each. From this we can infer that: a. Henry is not maximizing his utility. b. if Henry is maximizing his utility, then his marginal utility from the 12th peach he buys must be greater than his marginal utility from the 3rd apple he buys. c. if Henry is maximizing his utility, then his marginal utility from the 12th peach he buys must equal his marginal utility from the 3rd apple he buys. d. for Henry the law of diminishing marginal utility does not apply to peaches.

c. if Henry is maximizing his utility, then his marginal utility from the 12th peach he buys must equal his marginal utility from the 3rd apple he buys.

Suppose that at your current consumption of two goods, A and B, MUA/PA = 25 and MUB/PB = 20. In order to maximize, your utility you should: a. leave your spending unchanged. b. purchase less of A and more of B. c. purchase more of A and less of B. d. purchase less of A and B.

c. purchase more of A and less of B.

You are trying to decide how to spend your last lunch dollar. You should use that dollar to buy more of the item: a. that costs the least. b. that gives you the highest average utility per dollar. c. that gives you the highest marginal utility per dollar. d. from which you already have gained the greatest total utility.

c. that gives you the highest marginal utility per dollar.

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. Suppose the price of fish decreased to $1.50 a pound, and the price of shrimp remains $5 a pound. At Casey's original income of $150 per week, Casey can now buy a maximum of ______ pounds fish or a maximum of ______ pounds shrimp. a. 10; 30 b. 30; 50 c. 30; 100 d. 100; 30

d. 100; 30

Taylor's marginal utility from watching movies and from eating out (in utils) is shown below. Taylor spends exactly $100 every month on these two forms of entertainment, and the price of each movie is $10 and the price of each dinner is $20. Taylor's optimal combination of movies and eating out is: a. 3 movies and 3 dinners. b. 4 movies and 3 dinners. c. 3 movies and 4 dinners. d. 2 movies and 4 dinners.

d. 2 movies and 4 dinners.

Suppose that at a price of 25 cents per orange, 500 consumers each demand 4 oranges, and at a price of 20 cents per orange, 750 consumers each demand 5 oranges. Therefore, the market demand for oranges is ______ at a price of 25 cents per orange and ______ at a price of 20 cents per orange. a. 4; 5 b. 500; 750 c. 1250; 1500 d. 2000; 3750

d. 2000; 3750

Refer to the figure below. If the price of a t-shirt is $10 and the price of a sweater is $40, then the rational spending is satisfied when the consumer purchases ______ t-shirts and ______ sweaters. a. 1; 4 b. 3; 2 c. 4; 4 d. 2; 3

d. 2; 3

Refer to the figure below. Total utility increases with each additional pizza up to the ______ and then declines, but marginal utility ______ with each additional pizza consumed. a. 7th pizza; increases b. 6th pizza; increases c. 5th pizza; stays the same d. 6th pizza; decreases

d. 6th pizza; decreases

Refer to the figure below. The total utility of consuming 4 pizzas a week is: a. 15 b. 22.5 c. 75 d. 90

d. 90