Suppose Aly's marginal utility
per dollar on hamburgers is
greater than his marginal
utility per dollar on pizza.
Without any change in his
income, Benjamin can
increase his total utility if he
buys fewer hamburgers and more pizza.
buys more of both hamburgers and pizza.
buys less of both hamburgers and pizza.
buys more hamburgers and less pizza.
Habiba's total utility when she eats 1 chicken finger is 40
and when she eats 2 chicken fingers her total utility is 70.
Katie's marginal utility from her second chicken finger is
30.
110.
35.
70.
The principle of diminishing marginal utility implies that, as
the consumption of a good increases, the total utility from
the good ____ and the marginal utility from the good ____.
increases; increases
increases; decreases
decreases; decreases
decreases; increases
A consumer's total utility is maximized when all available
income is spent and the
marginal utility per dollar for all goods is equal.
marginal utility for all goods is equal.
total utility for all goods is equal.
total utility per dollar for all goods is equal.
Ahmad consumes video games and movies. The price of a
movie is $10 each and the price of a video game is $40 each.
When Ahmad spends all of his income, his marginal utility
per dollar for video games is 48 and his marginal utility per
dollar for movies is 12. To maximize his utility, Ahmad needs
to
buy more movies and fewer video games.
buy fewer video games and fewer movies.
buy more video games and fewer movies.
to do nothing because he already is maximizing his utility.
Omar is maximizing his utility. For him, the marginal utility
of another scoop of ice cream is 24 and the marginal utility
of a magazine is 48. If the price of a magazine is $4, then the
price of a scoop of ice cream
cannot be determined without additional information.
is $4.00.
is $0.50.
is $2.00.
Sara has a choice of spending $8.00 for another hamburger,
which has a marginal utility of 32, or $9.00 for another pizza.
For her to choose the pizza, it would have to have a marginal
utility of at least
9.
36.
8.
32.
When the price of soda rises, initially the
marginal utility of soda definitely decreases.
total utility for soda definitely increases.
marginal utility per dollar for soda definitely increases.
total expenditure on soda definitely falls.
A demand curve is a description of the quantity
demanded at each price when the consumer's
total utility is maximized.
marginal cost is maximized.
marginal utility is maximized.
marginal utility per dollar is maximized.
The Paradox of Value emphasizes that water is
inexpensive and diamonds are costly because
water has a high marginal utility but a small consumer surplus
whereas diamonds have a low marginal utility but a large
consumer surplus.
water has a high marginal utility and a large consumer surplus
whereas diamonds have a low marginal utility and a small
consumer surplus.
water has a low marginal utility but a large consumer surplus
whereas diamonds have a high marginal utility but a small
consumer surplus.
water has a low marginal utility and a small consumer surplus
whereas diamonds have a high marginal utility and a large
consumer surplus.
The utility
of a
particular
good:
A)is the same for everyone, even if its usefulness differs from
person to person.
B)is a measure of the product's usefulness.
C)typically increases at a constant rate.
D)typically increases at a decreasing rate.
2
Answer the next question on the basis of the following two
schedules, which show the amounts of additional satisfaction
(marginal utility) that a consumer derives from successive
quantities of products J and K.
Refer to the table. If this consumer has an income of $26 and the
prices of J and K are $2 and $4 respectively, the consumer will
maximize her utility by purchasing:
A)7 units of J and 3 units of K.
B)5 units of J and 4 units of K.
C)3 units of J and 5 units of K.
D)1 units of J and 6 units of K.
3
Jim enjoys having either a peanut butter sandwich or a burger
sandwich for his lunch. A drop in the price of peanut butter
increases the marginal utility per dollar of peanut butter and
causes Jim to buy more peanut butter and less burger to restore
maximum utility. This best illustrates the:
A)law of diminishing marginal utility.
B)income effect.
C)substitution effect.
D)law of increasing total utility.
4
Suppose the prices of products X and Y are $5 and $10,
respectively. For a specific consumer who is currently exhausting
her total income, the total utility from X is 100, while the total
utility from Y is 200. The marginal utility of X and Y are both equal
to 8. From this information, we can conclude:
A)she is maximizing total utility.
B)she should purchase relatively more X.
C)she should purchase relatively more Y.
D)nothing about whether she is maximizing total utility.
5
Suppose the price of an iced coffee is $4 and the price of a candy
bar is $2. In order to maximize total utility, a consumer who buys
some of each should allocate purchases such that:
A)the marginal utility of each good is the same.
B)the marginal utility of an iced coffee is half that of a candy
bar.
C)the marginal utility of an iced coffee is twice that of a
candy bar.
D)the total utility of an iced coffee is half that of a candy bar.
6
Kevin received 80 total units of utility from the first four chips he
consumed. If the marginal utilities of the first, second, and third
chips are 20, 25, and 20, respectively, the marginal utility of the
fourth chip is:
A)65 units of utility.
B)20 units of utility.
C)15 units of utility.
D)unknown, since Kevin's utility does not conform to the
usual rules.