econ #4

If the price of a product rises, consumers buy less of the good because the:

MU/P of the good falls below the MU/P of other goods

The change in total utility due to a 1-unit change in the quality consumed is:

marginal utility

A utility-maximizing consumer would NEVER purchase a good if the:

marginal utility is negative

Bonnie gets her hair cut at her usual salon and is very happy with the results. Later that afternoon, she goes to the mall and sees that a hair salon is giving away free haircuts only on that day. If Bonnie does NOT take advantage of the giveaway, it is because the:

marginal utility of the next haircut would be zero or negative

Assume a consumer purchases a combination of goods X and Y such that MUx/-Px = 20 units of utility per dollar and MUy/Py = 10 units of utility per dollar. To maximize utility, the consumers should buy:

more of X and less of Y

If total utility is falling, marginal utility is:

negative

On Thanksgiving, Jake's mother gives him a huge platter of food. If Jake were to keep eating just to please his mother (even when he really wanted to stop), his marginal utility would be:

negative

The total utilities associated with the first 5 units of consumption of good X are 15,30,40, 47, and 50, respectively. What is the marginal utility associated with the third unit?

10

Assume the total utilities corresponding to the first four units of a product consumed are 8, 12, 14, 15, respectively. The marginal utility of the third unit consumed is:

2

The marginal utilities associated with the first 4 units of consumption of good Y are 10, 12, 9, and 7, respectively. What is the total utility associated with the third unit?

31

Assume the total utilities corresponding to the first four units of a product consumed are 8, 12, 14, and 15, respectively. The marginal utility of the second unit consumed is:

4

The law of diminishing marginal utility exists for the first units of a good if they have marginal utilities of:

8, 4, 2, 1

As a general rule, marginal utility will be less:

as more of a good is consumed

The amount by which an additional unit of a good or service increases a consumer's total utility is:

marginal utility

Assume that an individual consumes only coffee and bagels and that the last cup of coffee yields 12 utils and the last bagel 6 utils. If the price of a cup of coffee is $1 and the price of a bagel is $.50, we can conclude that the:

consumer is in equilibrium

Assume that an individual consumes only hotdogs and colas and that the last hotdog consumed yields 15 utils and the last cola 10 utils. If the price of a hotdog is $1 and the price of a color is $.50, we can conclude that the:

consumer should consume fewer hotdogs and more cola

As more Big Macs are consumed each day, the marginal utility that a person gets from each additional Big Mac:

decreases

Utility theory assumes that marginal utility:

decreases as an individual consumes more of a product

Generally speaking, as more of a particular good is purchased, a consumer's marginal utility and total utility _______.

decreases; increases

According to the law of diminishing marginal utility, the marginal utility curve is________.

downward sloping

A util represents a unit of measurement for the:

happiness a person obtains from consuming a good

Utility is:

hard to measure, because it is a subject concept

If marginal utility is positive, then total utility is:

increasing

If the first four units of a good consumed have marginal utilities of 8, 4, 2, and 1, respectively, this trend is an indication of the:

law of diminishing marginal utility

The statement "as more of a good is consumed, the utility a person derives from each additional unit diminishes" is known as the:

law of diminishing marginal utility

Suppose that an individual consumes just two goods: Big Macs and milkshakes. In order to reach consumer equilibrium, the individual must arrange the consumption of Big Macs and milkshakes so that the:

ratio of marginal utility to price is the same for both goods for the last dollar spent on each good

Suppose the law of diminishing marginal utility holds for coffee. As a person drinks more coffee during the day, the total utility he or she receives will:

rise, but at slower and slower rates

If the price of a good falls, the marginal utility per dollar spent on that good:

rises

Utility is most closely defined by which of the following terms?

satisfaction

If utility is NOT maximized, then:

some change in consumption will increase satisfaction

Marginal utility is defined as:

the extra satisfaction a person derives from consuming an additional unit of a good

Consumers should continue to rearrange their consumption of two goods until:

the marginal utility per dollar's worth of the two goods is the same for the last dollar spent on each good

Suppose that for Merv the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per-serving popcorn is 10. For his snack, Merv should buy:

the popcorn, whether he has the $50 or not

A fall in marginal utility reflects:

the principle of diminishing marginal utility

A rational consumer should NOT consume more of a good when:

total utility is decreasing

Marginal utility is the change in:

total utility when an extra unit of output is consumed

At the point where total utility is at its peak, marginal utility is:

zero

When total utility is at maximum, marginal utility is:

zero