1. Suppose that the total utility from consuming one unit of good X is 54 utils, the total utility of two units of good X is 74 utils, and the total utility of three units of good X is 84 utils. The marginal utility of the third unit is
a.70.67 utils.
b.10 utils.
c.12.25 utils.
d.20 utils.
2. If income rises, the budget constraint
a. Moves outward away from the origin
b. Does not move
c. Moves inward toward the origin
d. Moves farther down the vertical axis
3. Economists assume that the goal of consumers is to maximize total utility.
true/false
4. The budget constraint cuts the horizontal axis at 12 units of good X and it cuts the vertical axis at 20 units of good Y. If the price of good X is $20 and the price of good Y is $12, then what does income equal?
a. $200
b. $240
c. $520
d. $280
e. not enough information to answer this question
5. Consumer equilibrium exists when an individual
a. can be made better off by buying more of a normal good and less of an inferior good.
b. is receiving the same total utility from each of the goods he or she purchases.
c. is receiving the same marginal utility from each of the goods he or she purchases.
d. has the same MU/P ratio for each of the goods he or she purchases.
e. none of the above
6. Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 30, 50, 65, 72, respectively. In this situation we have __________ marginal utility, which is generally __________ in the analysis of consumer choice.
a. diminishing; not assumed
b. increasing; assumed
c. diminishing; assumed
d. increasing; not assumed
7. Which of the following best describes an interpersonal utility comparison?
a. Usually, Smith seems a lot happier than Jones.
b. Smith gets more utility from working on his computer than Jones gets from working on his computer.
c. Smith usually eats more in a day than Jones eats in a day.
d. ones likes computers produced by Dell Computer Corporation and Smith likes computers produced by Apple Computer Inc
e. Smith got less utility from eating the 30th cookie than eating the 29th cookie, and the same holds for Jones.
8. We would expect the total utility of water to be high but its marginal utility to be low. Why?
a. Because we need water to live and there is so much of it.
b. Because we need water to live and there is very little of it.
c. Because water is a fluid and we don't need fluids to live as much as we need food
d. Because water's price is low.
9.The marginal utility curve for units 6 through 8 of good Z lies below the horizontal axis. What does this imply must be true about the total utility curve for units 6 through 8 of good Z?
a. That portion of good Zâs total utility curve must also lie below the horizontal axis.
b. That portion of good Zâs total utility curve must be upward sloping.
c. That portion of good Zâs total utility curve must be horizontal.
d. That portion of good Zâs total utility curve must be downward sloping.
10. Research presented in the text shows that people are more concerned with their absolute income position in a group than their relative income position in the group.
true/false
1. Suppose that the total utility from consuming one unit of good X is 54 utils, the total utility of two units of good X is 74 utils, and the total utility of three units of good X is 84 utils. The marginal utility of the third unit is
a.70.67 utils.
b.10 utils.
c.12.25 utils.
d.20 utils.
2. If income rises, the budget constraint
a. Moves outward away from the origin
b. Does not move
c. Moves inward toward the origin
d. Moves farther down the vertical axis
3. Economists assume that the goal of consumers is to maximize total utility.
true/false
4. The budget constraint cuts the horizontal axis at 12 units of good X and it cuts the vertical axis at 20 units of good Y. If the price of good X is $20 and the price of good Y is $12, then what does income equal?
a. $200
b. $240
c. $520
d. $280
e. not enough information to answer this question
5. Consumer equilibrium exists when an individual
a. can be made better off by buying more of a normal good and less of an inferior good.
b. is receiving the same total utility from each of the goods he or she purchases.
c. is receiving the same marginal utility from each of the goods he or she purchases.
d. has the same MU/P ratio for each of the goods he or she purchases.
e. none of the above
6. Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 30, 50, 65, 72, respectively. In this situation we have __________ marginal utility, which is generally __________ in the analysis of consumer choice.
a. diminishing; not assumed
b. increasing; assumed
c. diminishing; assumed
d. increasing; not assumed
7. Which of the following best describes an interpersonal utility comparison?
a. Usually, Smith seems a lot happier than Jones.
b. Smith gets more utility from working on his computer than Jones gets from working on his computer.
c. Smith usually eats more in a day than Jones eats in a day.
d. ones likes computers produced by Dell Computer Corporation and Smith likes computers produced by Apple Computer Inc
e. Smith got less utility from eating the 30th cookie than eating the 29th cookie, and the same holds for Jones.
8. We would expect the total utility of water to be high but its marginal utility to be low. Why?
a. Because we need water to live and there is so much of it.
b. Because we need water to live and there is very little of it.
c. Because water is a fluid and we don't need fluids to live as much as we need food
d. Because water's price is low.
9.The marginal utility curve for units 6 through 8 of good Z lies below the horizontal axis. What does this imply must be true about the total utility curve for units 6 through 8 of good Z?
a. That portion of good Zâs total utility curve must also lie below the horizontal axis.
b. That portion of good Zâs total utility curve must be upward sloping.
c. That portion of good Zâs total utility curve must be horizontal.
d. That portion of good Zâs total utility curve must be downward sloping.
10. Research presented in the text shows that people are more concerned with their absolute income position in a group than their relative income position in the group.
true/false
Related textbook solutions
Related questions
PLEASE FIND SOLUTIONS TO WHERE QUESTION MARKS ARE INDICATED AND SOLVE THE FORMULA AT BOTTOM
Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $9.00, the price of good B is $3.00, the price of good C is $2.00 and the price of good D is $12.00. Ricardo's income is $53.00.
| Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | |||||
| Units of Good A | MU | Units of Good B | MU | Units of Good C | MU | Units of Good D | MU | Number of Dollars Saved | MU |
| 1 | 72 | 1 | 24 | 1 | 15 | 1 | 36 | 1 | 5.00 |
| 2 | 54 | 2 | 15 | 2 | 12 | 2 | 30 | 2 | 4.00 |
| 3 | 45 | 3 | 12 | 3 | 8 | 3 | 24 | 3 | 3.00 |
| 4 | 36 | 4 | 9 | 4 | 7 | 4 | 18 | 4 | 2.00 |
| 5 | 27 | 5 | 7 | 5 | 5 | 5 | 13 | 5 | 1.00 |
| 6 | 18 | 6 | 5 | 6 | 4 | 6 | 7 | 6 | 0.50 |
| 7 | 15 | 7 | 2 | 7 | 3.5 | 7 | 4 | 7 | 0.25 |
| 8 | 12 | 8 | 1 | 8 | 3 | 8 | 2 | 8 | 0.13 |
What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?
Price of good A: $9.00, Units of A: ????
Price of good B: $3.00, Units of B: ?????
Price of good C: $2.00, Units of C: ????
Price of good D: $12.00, Units of D: ????
b. How many dollars will Ricardo choose to save? $?????
c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
( $ Ã ) + ( $ Ã ) + ( $ Ã ) + ( $ Ã ) + $ = $
