Question 1

From the viewpoint of potential criminals, the probability of being fined or imprisoned

Accepted Answer

The probability of being fined or imprisoned increases the potential costs associated with criminal behavior, thus raising the marginal cost or "price" of engaging in such behavior.

Question 2

If you purchase a gift worth $25 for your sister, but your sister would be willing to pay only $10 if she bought the item for herself, then the

Accepted Answer

The loss of value in the gift is $15 because you spent $25 on a gift that your sister values at only $10, indicating a discrepancy or loss in value of $15.

Question 3

Theft and burglary

Accepted Answer

Theft and burglary can be analyzed through the lens of economic rationality, where individuals weigh the marginal costs and benefits of their actions. This perspective suggests that individuals commit these crimes with the expectation that the benefits (e.g., financial gain) will outweigh the costs (e.g., risk of getting caught and punished).

Question 4

When the federal government started requiring restaurants to print calorie counts next to menu items,

Accepted Answer

The answer of When the federal government started requiring restaurants...

Question 5

Noncash gifts

Accepted Answer

Noncash gifts often fail to match recipient preferences as closely as cash would, leading to a potential reduction in utility for the recipient compared to what they could have achieved by purchasing something of their own choice with cash.

Question 6

According to economists, gift registries, returning gifts for cash refunds, and "recycling gifts"

Accepted Answer

Gift registries, returning gifts for cash, and recycling gifts increase efficiency by ensuring recipients get items they value more, thus maximizing utility and satisfaction from the gift exchange process.

Question 7

If you receive a gift whose market price is $20, but you consider it to be worth only $10, then

Accepted Answer

The perceived value of the gift to you is $10 less than its market price, indicating a value loss of $10 or 50 percent from its market price to your valuation.

Question 8

Understanding the water and diamond paradox is valuable because it explains why

Accepted Answer

The water and diamond paradox illustrates that the price of a product does not always reflect its intrinsic usefulness or value to society. It highlights how water, essential for life, is often cheaper than diamonds, which are less essential but priced higher due to their rarity and desirability. This paradox is used to explain the difference between 'value in use' and 'value in exchange'.

Question 9

When DVD players start becoming obsolete then, to potential thieves, the

Accepted Answer

As DVD players become obsolete, their value and demand decrease, making them less attractive to steal, thus decreasing their marginal utility to potential thieves.

Question 10

When the federal government started requiring restaurants to print calorie counts next to menu items, some people increased their consumption of higher-calorie items. Which of the following best explains this phenomenon?

Accepted Answer

Consumers may perceive higher calorie counts as better value for money, leading them to choose items that give them more calories per dollar spent, rather than focusing on the health aspects.

Question 11

The price of diamonds is substantially greater than the price of water because

Accepted Answer

The price of diamonds is higher than water because the marginal utility of the last diamond purchased is significantly greater than that of the last gallon of water. This is due to the relative scarcity and perceived value of diamonds compared to the abundance of water, making each additional diamond more valuable than an additional unit of water to a typical consumer.

Question 12

The fact that an ounce of gold is priced higher than an ounce of chocolate suggests that

Accepted Answer

The price of a good is often related to its marginal utility rather than its total utility. Gold's higher price suggests its marginal utility is greater than that of chocolate, meaning the satisfaction gained from the last unit consumed or purchased is higher for gold than for chocolate. This does not necessarily relate to total utility, the classification of goods as normal or inferior, or the availability of substitutes.

Question 13

The table shows the total utility data for products X and Y. Assume that the prices of X and Y are $3 and $4, respectively, and that consumer income is $18.  Which of the following price-quantity schedules would represent the demand for X in the $2 and $3 price range?

Accepted Answer

The answer of The table shows the total utility data...

Question 14

The increase in demand for iPad tablet computers can be explained by

Accepted Answer

The enhanced versatility and storage capacity of iPads increases their marginal utility per price (MU/P), making them more attractive to consumers and thus increasing demand.

Question 15

Most people do not steal, because

Accepted Answer

Most people refrain from stealing because the marginal costs of doing so, which include potential guilt and other psychological or social costs, outweigh the benefits they might gain from the stolen goods.

Question 16

A graph that shows the maximum combinations of two goods which a consumer can purchase with a given money income is

Accepted Answer

A budget line graphically represents the combination of two goods a consumer can purchase with a given income, showing the trade-offs and choices available within their budget constraints.

Question 17

The table shows the total utility data for products X and Y. Assume that the prices of X and Y are $3 and $4, respectively, and that consumer income is $18.  If the price of X decreases from $3 to $2, while the price of Y and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of X

Accepted Answer

The answer of The table shows the total utility data...

Question 18

All of the following would reduce property crime by increasing its "price," except

Accepted Answer

Options A, B, and C all involve increasing the cost or risk associated with committing property crimes, either through legal penalties, security measures, or reducing the economic incentive to commit crimes by providing better legal earning opportunities. Option D, however, would potentially make it easier for criminals to sell stolen goods by providing a direct and possibly anonymous way to reach buyers, thus reducing the "price" of property crime by making it more profitable or easier, rather than increasing it.

Question 19

The table shows the total utility data for products X and Y. Assume that the prices of X and Y are $3 and $4, respectively, and that consumer income is $18.  How many units of the two products will the consumer buy to get maximum utility?

Accepted Answer

The answer of The table shows the total utility data...

Question 20

Many people do not steal or commit fraud because to them, the resulting feelings of guilt and uneasiness make the

Accepted Answer

The feelings of guilt and uneasiness associated with stealing or committing fraud add to the negative consequences (or costs) of these actions, thus increasing the marginal cost of the act.

Quiz 7: Utility Maximization

From the viewpoint of potential criminals, the probability of being fined or imprisoned

If you purchase a gift worth $25 for your sister, but your sister would be willing to pay only $10 if she bought the item for herself, then the

Theft and burglary

When the federal government started requiring restaurants to print calorie counts next to menu items,

Noncash gifts

According to economists, gift registries, returning gifts for cash refunds, and "recycling gifts"

If you receive a gift whose market price is $20, but you consider it to be worth only $10, then

Understanding the water and diamond paradox is valuable because it explains why

When DVD players start becoming obsolete then, to potential thieves, the

When the federal government started requiring restaurants to print calorie counts next to menu items, some people increased their consumption of higher-calorie items. Which of the following best explains this phenomenon?

The price of diamonds is substantially greater than the price of water because

The fact that an ounce of gold is priced higher than an ounce of chocolate suggests that

The table shows the total utility data for products X and Y. Assume that the prices of X and Y are $3 and $4, respectively, and that consumer income is $18. Which of the following price-quantity schedules would represent the demand for X in the $2 and $3 price range?

The increase in demand for iPad tablet computers can be explained by

Most people do not steal, because

A graph that shows the maximum combinations of two goods which a consumer can purchase with a given money income is

All of the following would reduce property crime by increasing its "price," except

The table shows the total utility data for products X and Y. Assume that the prices of X and Y are $3 and $4, respectively, and that consumer income is $18. How many units of the two products will the consumer buy to get maximum utility?

Many people do not steal or commit fraud because to them, the resulting feelings of guilt and uneasiness make the