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Deck 5: Consumer Choice
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Refer to the information above to answer this question.If the price of this product is $5,how many units should this consumer purchase?
A)4.
B)5.
C)6.
D)Cannot be answered from this information.
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The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?
A)10.
B)14.
C)80.
D)124.
E)130.
Refer to the above graph to answer this question.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?
A)10.
B)14.
C)80.
D)124.
E)130.
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Refer to the above information to answer this question.After the consumption of how many units will total utility be maximized?
A)4.
B)5.
C)7.
D)8.
E)Cannot be determined.
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Refer to the above information to answer this question.What is the total utility of 7 units?
A)15.
B)25.
C)256.
D)271.
E)Cannot be determined.
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Refer to the above information to answer this question.What is the marginal utility of the 3rd unit?
A)30.
B)45.
C)48.
D)143.
E)Cannot be determined.
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Refer to the above information to answer this question.How many units should this consumer purchase?
A)0.
B)1.
C)7.
D)8.
E)Cannot be determined.
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The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.If the price of milk is $2,the price of a cookie is $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)0 milk and 7 cookies.
B)1 milk and 5 cookies.
C)2 milk and 3 cookies.
D)3 milk and 1 cookie.
E)3 milk and 4 cookies.
Refer to the above graph to answer this question.If the price of milk is $2,the price of a cookie is $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)0 milk and 7 cookies.
B)1 milk and 5 cookies.
C)2 milk and 3 cookies.
D)3 milk and 1 cookie.
E)3 milk and 4 cookies.
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The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.If the price of both milk and cookies are $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
Refer to the above graph to answer this question.If the price of both milk and cookies are $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
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The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be the total utility of his optimal purchase?
A)12 utils.
B)41 utils.
C)50 utils.
D)57 utils.
E)98 utils.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be the total utility of his optimal purchase?
A)12 utils.
B)41 utils.
C)50 utils.
D)57 utils.
E)98 utils.
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The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?
A)1 bagel and 5 ciders.
B)2 bagels and 4 ciders.
C)3 bagels and 3 ciders.
D)4 bagels and 2 ciders.
E)5 bagels and 1 ciders.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?
A)1 bagel and 5 ciders.
B)2 bagels and 4 ciders.
C)3 bagels and 3 ciders.
D)4 bagels and 2 ciders.
E)5 bagels and 1 ciders.
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The following graph shows the total utility obtained from rice crackers and beer by Carla.
Refer to the above graph to answer this question.If the price of both rice crackers and beer are $2,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)3 crackers and 4 beers.
B)4 crackers and 3 beers.
C)5 crackers and 2 beers.
D)6 crackers and 1 beer.
E)7 crackers.
Refer to the above graph to answer this question.If the price of both rice crackers and beer are $2,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)3 crackers and 4 beers.
B)4 crackers and 3 beers.
C)5 crackers and 2 beers.
D)6 crackers and 1 beer.
E)7 crackers.
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The following table shows Ketta's utility for eggs and bacon.
Refer to the above information to answer this question.If Ketta has a budget of $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)5 bacon.
B)1 egg and 4 bacon.
C)2 eggs and 3 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 1 bacon.
Refer to the above information to answer this question.If Ketta has a budget of $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)5 bacon.
B)1 egg and 4 bacon.
C)2 eggs and 3 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 1 bacon.
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The following graph shows the total utility obtained from rice crackers and beer by Carla.
Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?
A)2 crackers and 4 beers.
B)3 crackers and 3 beers.
C)3 crackers and 4 beers.
D)4 crackers and 3 beers.
E)5 crackers.
Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?
A)2 crackers and 4 beers.
B)3 crackers and 3 beers.
C)3 crackers and 4 beers.
D)4 crackers and 3 beers.
E)5 crackers.
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The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be his optimal purchase?
A)2 bagel and 5 ciders.
B)4 bagel and 4 ciders.
C)6 bagels and 3 ciders.
D)8 bagels and 2 ciders.
E)10 bagels and 1 ciders.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be his optimal purchase?
A)2 bagel and 5 ciders.
B)4 bagel and 4 ciders.
C)6 bagels and 3 ciders.
D)8 bagels and 2 ciders.
E)10 bagels and 1 ciders.
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The following table shows Ketta's utility for eggs and bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)1 egg and 7 bacon.
B)2 eggs and 6 bacon.
C)3 eggs and 5 bacon.
D)4 eggs and 4 bacon.
E)5 eggs and 3 bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)1 egg and 7 bacon.
B)2 eggs and 6 bacon.
C)3 eggs and 5 bacon.
D)4 eggs and 4 bacon.
E)5 eggs and 3 bacon.
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The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)96 utils.
B)116 utils.
C)210 utils.
D)331 utils.
E)541 utils.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)96 utils.
B)116 utils.
C)210 utils.
D)331 utils.
E)541 utils.
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The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.Which of the following combinations will give Sandeep the greatest total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
Refer to the above graph to answer this question.Which of the following combinations will give Sandeep the greatest total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
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The following graph shows the total utility obtained from rice crackers and beer by Carla.
Refer to the above graph to answer this question.If the price of rice crackers are $2,beer is $3,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)1 cracker and 4 beers.
B)2 crackers and 3 beers.
C)3 crackers and 3 beers.
D)4 crackers and 2 beers.
E)5 crackers and 1 beer.
Refer to the above graph to answer this question.If the price of rice crackers are $2,beer is $3,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)1 cracker and 4 beers.
B)2 crackers and 3 beers.
C)3 crackers and 3 beers.
D)4 crackers and 2 beers.
E)5 crackers and 1 beer.
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The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be her optimal purchase?
A)0 muffin and 5 grapefruit.
B)1 muffin and 3 grapefruit.
C)2 muffins and 1 grapefruit.
D)3 muffins and 0 grapefruit.
E)3 muffins and 1 grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be her optimal purchase?
A)0 muffin and 5 grapefruit.
B)1 muffin and 3 grapefruit.
C)2 muffins and 1 grapefruit.
D)3 muffins and 0 grapefruit.
E)3 muffins and 1 grapefruit.
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The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be the total utility of his optimal purchase?
A)9 utils.
B)10 utils.
C)21 utils.
D)87 utils.
E)97 utils.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be the total utility of his optimal purchase?
A)9 utils.
B)10 utils.
C)21 utils.
D)87 utils.
E)97 utils.
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The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be the total utility of her optimal purchase?
A)56 utils.
B)96 utils.
C)145 utils.
D)146 utils.
E)331 utils.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be the total utility of her optimal purchase?
A)56 utils.
B)96 utils.
C)145 utils.
D)146 utils.
E)331 utils.
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The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 7 grapefruit.
B)2 muffin and 6 grapefruit.
C)3 muffins and 5 grapefruit.
D)4 muffins and 4 grapefruit.
E)5 muffins and 3 grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 7 grapefruit.
B)2 muffin and 6 grapefruit.
C)3 muffins and 5 grapefruit.
D)4 muffins and 4 grapefruit.
E)5 muffins and 3 grapefruit.
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The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 4 grapefruit.
B)2 muffins and 3 grapefruit.
C)3 muffins and 2 grapefruit.
D)4 muffins and 1 grapefruit.
E)5 muffins.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 4 grapefruit.
B)2 muffins and 3 grapefruit.
C)3 muffins and 2 grapefruit.
D)4 muffins and 1 grapefruit.
E)5 muffins.
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The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)66 utils.
B)126 utils.
C)136 utils.
D)363 utils.
E)423 utils.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)66 utils.
B)126 utils.
C)136 utils.
D)363 utils.
E)423 utils.
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The following table shows Ketta's utility for eggs and bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?
A)0 egg and 8 bacon.
B)1 egg and 6 bacon.
C)2 eggs and 4 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 0 bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?
A)0 egg and 8 bacon.
B)1 egg and 6 bacon.
C)2 eggs and 4 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 0 bacon.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples and 4 bagels.
B)2 apples,2 bagels and 1 cappuccino.
C)2 apples and 2 cappuccinos.
D)1 bagel and 2 cappuccinos.
E)3 bagels and 1 cappuccino.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples and 4 bagels.
B)2 apples,2 bagels and 1 cappuccino.
C)2 apples and 2 cappuccinos.
D)1 bagel and 2 cappuccinos.
E)3 bagels and 1 cappuccino.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples,2 bagels and 2 cappuccinos.
B)2 apples,4 bagels and 1 cappuccino.
C)4 apples,1 bagel and 2 cappuccinos.
D)4 apples,3 bagels and 1 cappuccino.
E)4 apples and 5 bagels.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples,2 bagels and 2 cappuccinos.
B)2 apples,4 bagels and 1 cappuccino.
C)4 apples,1 bagel and 2 cappuccinos.
D)4 apples,3 bagels and 1 cappuccino.
E)4 apples and 5 bagels.
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The following table shows Mia's $ marginal utility for litres of soya milk:
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?
A)0.
B)4 litres.
C)5 litres.
D)6 litres.
E)Cannot be determined.
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?
A)0.
B)4 litres.
C)5 litres.
D)6 litres.
E)Cannot be determined.
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The following table shows Mia's $ marginal utility for litres of soya milk:
If the price of soya milk is $8 per litre,what is the maximum number of litres that Mia will buy?
A)0.
B)1.
C)2.
D)3.
E)7.
If the price of soya milk is $8 per litre,what is the maximum number of litres that Mia will buy?
A)0.
B)1.
C)2.
D)3.
E)7.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)393 utils.
B)408 utils.
C)500 utils.
D)548 utils.
E)636 utils.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)393 utils.
B)408 utils.
C)500 utils.
D)548 utils.
E)636 utils.
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The following table shows Mia's $ marginal utility for litres of soya milk:
If the price of soya milk is $2 per litre,what is the maximum number of litres that Mia will buy?
A)1.
B)3.
C)4.
D)6.
E)7.
If the price of soya milk is $2 per litre,what is the maximum number of litres that Mia will buy?
A)1.
B)3.
C)4.
D)6.
E)7.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?
A)The marginal utility from employment dollars is greater than that from investment dollars.
B)The marginal utility from employment dollars is less than that from investment dollars.
C)The consumer surplus derived from employment income is greater than that from investment income.
D)The consumer surplus derived from employment income is smaller than that from investment income.
In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?
A)The marginal utility from employment dollars is greater than that from investment dollars.
B)The marginal utility from employment dollars is less than that from investment dollars.
C)The consumer surplus derived from employment income is greater than that from investment income.
D)The consumer surplus derived from employment income is smaller than that from investment income.
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The following table shows Mia's $ marginal utility for litres of soya milk:
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,how much consumer surplus will Mia receive as a result of her purchases?
A)0.
B)$1.
C)$15.
D)$35.
E)Cannot be determined.
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,how much consumer surplus will Mia receive as a result of her purchases?
A)0.
B)$1.
C)$15.
D)$35.
E)Cannot be determined.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
According to consumer research,what happens to the proportion of disposable income which is spent by Canadians on the various product groups as the level of income increases?
A)The fraction spent on both food and travel increases whereas the amount spent on shelter decreases.
B)The fraction spent on both food and shelter decreases whereas the amount spent on travel increases.
C)The fraction spent on both food and travel decreases whereas the amount spent on shelter increases.
D)The fraction spent on food decreases whereas the amount spent on both travel and shelter increases.
According to consumer research,what happens to the proportion of disposable income which is spent by Canadians on the various product groups as the level of income increases?
A)The fraction spent on both food and travel increases whereas the amount spent on shelter decreases.
B)The fraction spent on both food and shelter decreases whereas the amount spent on travel increases.
C)The fraction spent on both food and travel decreases whereas the amount spent on shelter increases.
D)The fraction spent on food decreases whereas the amount spent on both travel and shelter increases.
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Refer to the graph above to answer this question.At what quantity would this consumer maximize her total utility?
A)5.
B)9.
C)10.
D)18.
E)Cannot be determined.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
If a consumer buys more than one unit of a product,which of the following statements is true?
A)The value of the last unit purchased must be greater than the value of the previous units,otherwise it would not be bought.
B)The consumer rates the value of each unit equally,otherwise she would not buy more of the item.
C)The value of the last unit purchased is always less than the value of the previous units.
D)It is the value of the first unit purchased which determines the total number of units which will be purchased.
If a consumer buys more than one unit of a product,which of the following statements is true?
A)The value of the last unit purchased must be greater than the value of the previous units,otherwise it would not be bought.
B)The consumer rates the value of each unit equally,otherwise she would not buy more of the item.
C)The value of the last unit purchased is always less than the value of the previous units.
D)It is the value of the first unit purchased which determines the total number of units which will be purchased.
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The following table shows Mia's $ marginal utility for litres of soya milk:
Refer to the above table to answer this question.Suppose that soya milk is free,how much will Mia consume?
A)0.
B)4 litres.
C)5 litres.
D)7 litres.
E)Cannot be determined.
Refer to the above table to answer this question.Suppose that soya milk is free,how much will Mia consume?
A)0.
B)4 litres.
C)5 litres.
D)7 litres.
E)Cannot be determined.
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Refer to the graph above to answer this question.What is the maximum price that would be paid by this consumer,assuming that partial units cannot be purchased?
A)$9.
B)$10.
C)$16.
D)$18.
E)Cannot be determined.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Assume that Gina is allocating her budget optimally between two products.If the MU of product X is 40 and its price is $8,what must be the price of product Y if its MU is 60?
A)$7.50.
B)$12.
C)$16.
D)$40.
E)$300.
Assume that Gina is allocating her budget optimally between two products.If the MU of product X is 40 and its price is $8,what must be the price of product Y if its MU is 60?
A)$7.50.
B)$12.
C)$16.
D)$40.
E)$300.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)436 utils.
B)508 utils.
C)500 utils.
D)526 utils.
E)548 utils.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)436 utils.
B)508 utils.
C)500 utils.
D)526 utils.
E)548 utils.
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Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Why does the demand curve slope downward?
A)Since the marginal utility increases with increased consumption,people will be eager to buy more at lower prices.
B)Since the marginal utility decreases with increased consumption,the price must fall in order to induce people to buy more.
C)Since total utility increases with increased consumption,a lower price is necessary to encourage increased production.
D)Lower prices mean a lower consumer surplus which will encourage increased consumption.
Why does the demand curve slope downward?
A)Since the marginal utility increases with increased consumption,people will be eager to buy more at lower prices.
B)Since the marginal utility decreases with increased consumption,the price must fall in order to induce people to buy more.
C)Since total utility increases with increased consumption,a lower price is necessary to encourage increased production.
D)Lower prices mean a lower consumer surplus which will encourage increased consumption.
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In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,what would be their maximum total revenue?
A)$550.
B)$595.
C)$625.50.
D)$636.
E)$670.
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,what would be their maximum total revenue?
A)$550.
B)$595.
C)$625.50.
D)$636.
E)$670.
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The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $120 per unit,and Lisa has $720 to spend,how many units of each would she purchase?
A)6 water.
B)4 water and 2 diamonds.
C)3 water and 3 diamonds.
D)2 water and 3 diamonds.
E)2 water and 4 diamonds.
Refer to the above information to answer this question.If the price of both water and diamonds is $120 per unit,and Lisa has $720 to spend,how many units of each would she purchase?
A)6 water.
B)4 water and 2 diamonds.
C)3 water and 3 diamonds.
D)2 water and 3 diamonds.
E)2 water and 4 diamonds.
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total expenditure if the price of each kilogram of blueberries is $2?
A)$2.
B)$4.
C)$6.
D)$12.
E)Cannot be determined.
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total expenditure if the price of each kilogram of blueberries is $2?
A)$2.
B)$4.
C)$6.
D)$12.
E)Cannot be determined.
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,how many units of each would she purchase?
A)5 waters.
B)4 waters and 1 diamond.
C)3 waters and 2 diamonds.
D)2 waters and 3 diamonds.
E)1 water and 4 diamonds.
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,how many units of each would she purchase?
A)5 waters.
B)4 waters and 1 diamond.
C)3 waters and 2 diamonds.
D)2 waters and 3 diamonds.
E)1 water and 4 diamonds.
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total willingness to pay for 6 kilograms of blueberries if the price of each kilogram of blueberries is $2?
A)$2.
B)$18.
C)$6.
D)$12.
E)Cannot be determined.
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total willingness to pay for 6 kilograms of blueberries if the price of each kilogram of blueberries is $2?
A)$2.
B)$18.
C)$6.
D)$12.
E)Cannot be determined.
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $700 to spend,how many units of each would she purchase?
A)7 water
B)4 water and 3 diamonds.
C)3 water and 4 diamonds.
D)2 water and 5 diamonds.
E)1 water and 6 diamonds.
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $700 to spend,how many units of each would she purchase?
A)7 water
B)4 water and 3 diamonds.
C)3 water and 4 diamonds.
D)2 water and 5 diamonds.
E)1 water and 6 diamonds.
Question
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,in order to maximize total revenue what would that price be?
A)$5.00.
B)$4.50.
C)$4.00.
D)$3.50.
E)$3.00.
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,in order to maximize total revenue what would that price be?
A)$5.00.
B)$4.50.
C)$4.00.
D)$3.50.
E)$3.00.
Question
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
What is the term for the selling of an identical product at a different price to different customers for reasons other than cost?
A)Price discrimination.
B)Product substitution.
C)Marginal utility.
D)Consumer surplus.
What is the term for the selling of an identical product at a different price to different customers for reasons other than cost?
A)Price discrimination.
B)Product substitution.
C)Marginal utility.
D)Consumer surplus.
Question
Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.What is the total revenue of the tennis coach?
A)$20.
B)$30.
C)$80.
D)$110.
E)Cannot be determined.
Question
Question
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize total revenue what price should be charged to type A,type B and type O respectively?
A)$3,$3 and $4.
B)$3,$4 and $4.
C)$3,$4 and $5.
D)$3.50,$4 and $4.50.
E)$4,$4.50 and $5.
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize total revenue what price should be charged to type A,type B and type O respectively?
A)$3,$3 and $4.
B)$3,$4 and $4.
C)$3,$4 and $5.
D)$3.50,$4 and $4.50.
E)$4,$4.50 and $5.
Question
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,what would be the total revenue received?
A)$550.
B)$595.
C)$625.50
D)$636.
E)$670.
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,what would be the total revenue received?
A)$550.
B)$595.
C)$625.50
D)$636.
E)$670.
Question
Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.Suppose the coach provides lessons to the children only.What is the amount of the consumer surplus of the children taking the tennis lessons?
A)$20.
B)$50.
C)$120.
D)$160.
E)Cannot be determined.
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
What is price discrimination?
A)The selling of different products to the same customer at different prices.
B)The selling of an identical product to different customers at the same price.
C)The selling of an identical product to different customers at different prices.
D)The selling of different products to different customers at different prices.
What is price discrimination?
A)The selling of different products to the same customer at different prices.
B)The selling of an identical product to different customers at the same price.
C)The selling of an identical product to different customers at different prices.
D)The selling of different products to different customers at different prices.
Question
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize revenue,which of the following statements is correct?
A)The consumer group with the highest price elasticity of demand should be charged the highest price.
B)The consumer group with the highest price elasticity of demand should be charged the lowest price.
C)The consumer group with the lowest price elasticity of demand should be charged the lowest price.
D)The consumer group which should be charged the highest price depends upon which has the smallest marginal utility.
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize revenue,which of the following statements is correct?
A)The consumer group with the highest price elasticity of demand should be charged the highest price.
B)The consumer group with the highest price elasticity of demand should be charged the lowest price.
C)The consumer group with the lowest price elasticity of demand should be charged the lowest price.
D)The consumer group which should be charged the highest price depends upon which has the smallest marginal utility.
Question
What is marginal utility?
A)It is the total satisfaction resulting from consuming a product.
B)It is the total satisfaction resulting from consuming all products.
C)It is the additional satisfaction resulting from consuming one more unit of all products.
D)It is the additional satisfaction resulting from consuming one more unit of a product.
Question
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,what is the value of her total consumer surplus if she purchases the optimal quantity?
A)0.
B)$375.
C)$620.
D)$875.
E)$1,120.
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,what is the value of her total consumer surplus if she purchases the optimal quantity?
A)0.
B)$375.
C)$620.
D)$875.
E)$1,120.
Question
Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.The tennis coach is practicing:
A)Peak load pricing
B)Three part pricing
C)Price discrimination
D)Bundling
E)All of the choices are correct.
Question
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Deck 5: Consumer Choice
1
What is meant by the term utility?
A)A measure of a product's usefulness.
B)A measure of necessity.
C)The satisfaction or pleasure derived from the consumption of a product.
D)The benefit derived from the production of a product.
A)A measure of a product's usefulness.
B)A measure of necessity.
C)The satisfaction or pleasure derived from the consumption of a product.
D)The benefit derived from the production of a product.
The satisfaction or pleasure derived from the consumption of a product.
2
Suppose that Reza buys two products and that the marginal utility of an additional carton of soy milk is 20 and its price is $1.25,whereas the marginal utility for an additional orange costing 50 cents is 7.
Refer to the above information to answer this question.What can be deduced?
A)The MU per dollar spent on soya milk is equal to that of an orange.
B)The MU per dollar spent on soya milk is greater than that of an orange.
C)The MU per dollar spent on soya milk is less than that of an orange.
D)The MU per dollar spent on soya milk is 25.
E)The MU per dollar spent on an orange is $3.50.
Refer to the above information to answer this question.What can be deduced?
A)The MU per dollar spent on soya milk is equal to that of an orange.
B)The MU per dollar spent on soya milk is greater than that of an orange.
C)The MU per dollar spent on soya milk is less than that of an orange.
D)The MU per dollar spent on soya milk is 25.
E)The MU per dollar spent on an orange is $3.50.
The MU per dollar spent on soya milk is greater than that of an orange.
3
Which of the following is correct in reference to the law of diminishing marginal utility?
A)The amount of additional utility decreases as successive units of a product are consumed.
B)Marginal utility increases at first,but after some point starts to decline.
C)Total utility declines at first,but after some point starts to increase.
D)Marginal utility increases as more of a product is consumed.
A)The amount of additional utility decreases as successive units of a product are consumed.
B)Marginal utility increases at first,but after some point starts to decline.
C)Total utility declines at first,but after some point starts to increase.
D)Marginal utility increases as more of a product is consumed.
The amount of additional utility decreases as successive units of a product are consumed.
4
What concept explains why a consumer should purchase the product which yields the greatest marginal utility per dollar spent?
A)Law of diminishing marginal utility.
B)Law of diminishing returns.
C)Optimal purchasing rule.
D)Consumer surplus rule.
A)Law of diminishing marginal utility.
B)Law of diminishing returns.
C)Optimal purchasing rule.
D)Consumer surplus rule.
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5
What is the correct expression for marginal utility?
A)TU/price.
B) TU/price.
C) TU/ quantity.
D)TU/quantity.
A)TU/price.
B) TU/price.
C) TU/ quantity.
D)TU/quantity.
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6
Refer to the information above to answer this question.If the price of this product is $5,how many units should this consumer purchase?
A)4.
B)5.
C)6.
D)Cannot be answered from this information.
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7
The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?
A)10.
B)14.
C)80.
D)124.
E)130.
Refer to the above graph to answer this question.What would be Sandeep's total utility if he consumed 5 milk and 5 cookies?
A)10.
B)14.
C)80.
D)124.
E)130.
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8
Refer to the above information to answer this question.After the consumption of how many units will total utility be maximized?
A)4.
B)5.
C)7.
D)8.
E)Cannot be determined.
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9
Refer to the above information to answer this question.What is the total utility of 7 units?
A)15.
B)25.
C)256.
D)271.
E)Cannot be determined.
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10
When is marginal utility equal to zero?
A)When TU is zero.
B)When MU is at its maximum.
C)When TU is at its maximum.
D)When MU is at its minimum.
A)When TU is zero.
B)When MU is at its maximum.
C)When TU is at its maximum.
D)When MU is at its minimum.
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11
What is the correct expression for marginal utility?
A)It is equal to total utility divided by quantity consumed.
B)It is the change in total utility resulting from a change in the quantity consumed.
C)It is equal to total utility divided by the quantity demanded.
D)It is equal to the additional utility divided by the quantity consumed.
A)It is equal to total utility divided by quantity consumed.
B)It is the change in total utility resulting from a change in the quantity consumed.
C)It is equal to total utility divided by the quantity demanded.
D)It is equal to the additional utility divided by the quantity consumed.
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12
When is total utility at a maximum?
A)When marginal utility is at a maximum.
B)When marginal utility is zero.
C)When marginal utility is equal to total utility.
D)When marginal utility is greater than total utility.
A)When marginal utility is at a maximum.
B)When marginal utility is zero.
C)When marginal utility is equal to total utility.
D)When marginal utility is greater than total utility.
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13
Refer to the above information to answer this question.What is the marginal utility of the 3rd unit?
A)30.
B)45.
C)48.
D)143.
E)Cannot be determined.
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14
What is marginal utility?
A)The utility derived from marginal products.
B)The utility derived from the consumption of all products.
C)The utility derived from the consumption of the average product.
D)The utility derived from the consumption of an extra unit of a product.
A)The utility derived from marginal products.
B)The utility derived from the consumption of all products.
C)The utility derived from the consumption of the average product.
D)The utility derived from the consumption of an extra unit of a product.
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15
What does the law of diminishing marginal utility state?
A)That the amount of additional utility increases as successive units of a product are consumed.
B)That the amount of total utility decreases at an increasing rate.
C)That the amount of total utility decreases at a decreasing rate.
D)That the amount of additional utility decreases as successive units of a product are consumed.
A)That the amount of additional utility increases as successive units of a product are consumed.
B)That the amount of total utility decreases at an increasing rate.
C)That the amount of total utility decreases at a decreasing rate.
D)That the amount of additional utility decreases as successive units of a product are consumed.
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16
What is meant by the term margin?
A)A measure of desire.
B)The extra or additional unit.
C)A measure of the ability to purchase.
D)The difference between the total and the average.
A)A measure of desire.
B)The extra or additional unit.
C)A measure of the ability to purchase.
D)The difference between the total and the average.
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17
Refer to the above information to answer this question.How many units should this consumer purchase?
A)0.
B)1.
C)7.
D)8.
E)Cannot be determined.
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18
What is the amount of additional utility derived from the consumption of an extra unit of a product called?
A)Marginal utility.
B)Optimal utility.
C)Marginal demand.
D)Optimal demand.
A)Marginal utility.
B)Optimal utility.
C)Marginal demand.
D)Optimal demand.
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19
Suppose that Reza buys two products and that the marginal utility of an additional carton of soy milk is 20 and its price is $1.25,whereas the marginal utility for an additional orange costing 50 cents is 7.
Refer to the above information to answer this question.What can be deduced?
A)Reza should buy more oranges.
B)Reza should reduce his consumption of soya milk.
C)Reza should buy more soya milk.
D)Reza should divide his budget equally between soya milk and oranges.
E)Nothing can be deduced.
Refer to the above information to answer this question.What can be deduced?
A)Reza should buy more oranges.
B)Reza should reduce his consumption of soya milk.
C)Reza should buy more soya milk.
D)Reza should divide his budget equally between soya milk and oranges.
E)Nothing can be deduced.
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20
If total utility is falling,what is also true?
A)Marginal utility must be negative.
B)Marginal utility must also be falling.
C)Marginal utility must be greater than total utility.
D)Marginal utility must be rising.
A)Marginal utility must be negative.
B)Marginal utility must also be falling.
C)Marginal utility must be greater than total utility.
D)Marginal utility must be rising.
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21
The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.If the price of milk is $2,the price of a cookie is $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)0 milk and 7 cookies.
B)1 milk and 5 cookies.
C)2 milk and 3 cookies.
D)3 milk and 1 cookie.
E)3 milk and 4 cookies.
Refer to the above graph to answer this question.If the price of milk is $2,the price of a cookie is $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)0 milk and 7 cookies.
B)1 milk and 5 cookies.
C)2 milk and 3 cookies.
D)3 milk and 1 cookie.
E)3 milk and 4 cookies.
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22
The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.If the price of both milk and cookies are $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
Refer to the above graph to answer this question.If the price of both milk and cookies are $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
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23
The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be the total utility of his optimal purchase?
A)12 utils.
B)41 utils.
C)50 utils.
D)57 utils.
E)98 utils.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be the total utility of his optimal purchase?
A)12 utils.
B)41 utils.
C)50 utils.
D)57 utils.
E)98 utils.
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24
The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?
A)1 bagel and 5 ciders.
B)2 bagels and 4 ciders.
C)3 bagels and 3 ciders.
D)4 bagels and 2 ciders.
E)5 bagels and 1 ciders.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be his optimal purchase?
A)1 bagel and 5 ciders.
B)2 bagels and 4 ciders.
C)3 bagels and 3 ciders.
D)4 bagels and 2 ciders.
E)5 bagels and 1 ciders.
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25
The following graph shows the total utility obtained from rice crackers and beer by Carla.
Refer to the above graph to answer this question.If the price of both rice crackers and beer are $2,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)3 crackers and 4 beers.
B)4 crackers and 3 beers.
C)5 crackers and 2 beers.
D)6 crackers and 1 beer.
E)7 crackers.
Refer to the above graph to answer this question.If the price of both rice crackers and beer are $2,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)3 crackers and 4 beers.
B)4 crackers and 3 beers.
C)5 crackers and 2 beers.
D)6 crackers and 1 beer.
E)7 crackers.
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26
The following table shows Ketta's utility for eggs and bacon.
Refer to the above information to answer this question.If Ketta has a budget of $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)5 bacon.
B)1 egg and 4 bacon.
C)2 eggs and 3 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 1 bacon.
Refer to the above information to answer this question.If Ketta has a budget of $5 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)5 bacon.
B)1 egg and 4 bacon.
C)2 eggs and 3 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 1 bacon.
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27
The following graph shows the total utility obtained from rice crackers and beer by Carla.
Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?
A)2 crackers and 4 beers.
B)3 crackers and 3 beers.
C)3 crackers and 4 beers.
D)4 crackers and 3 beers.
E)5 crackers.
Refer to the above graph to answer this question.If the price of rice crackers are $3,beer is $2,and Carla has a budget of $15,how much of each will she purchase if she wishes to maximize her total utility?
A)2 crackers and 4 beers.
B)3 crackers and 3 beers.
C)3 crackers and 4 beers.
D)4 crackers and 3 beers.
E)5 crackers.
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28
The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be his optimal purchase?
A)2 bagel and 5 ciders.
B)4 bagel and 4 ciders.
C)6 bagels and 3 ciders.
D)8 bagels and 2 ciders.
E)10 bagels and 1 ciders.
Refer to the above information to answer this question.If Pierre has a budget of $12,the price of bagels is $1 and cider is $2,what will be his optimal purchase?
A)2 bagel and 5 ciders.
B)4 bagel and 4 ciders.
C)6 bagels and 3 ciders.
D)8 bagels and 2 ciders.
E)10 bagels and 1 ciders.
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29
The following table shows Ketta's utility for eggs and bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)1 egg and 7 bacon.
B)2 eggs and 6 bacon.
C)3 eggs and 5 bacon.
D)4 eggs and 4 bacon.
E)5 eggs and 3 bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of both eggs and bacon are $1,what will be her optimal purchase?
A)1 egg and 7 bacon.
B)2 eggs and 6 bacon.
C)3 eggs and 5 bacon.
D)4 eggs and 4 bacon.
E)5 eggs and 3 bacon.
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30
The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)96 utils.
B)116 utils.
C)210 utils.
D)331 utils.
E)541 utils.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)96 utils.
B)116 utils.
C)210 utils.
D)331 utils.
E)541 utils.
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31
The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.
Refer to the above graph to answer this question.Which of the following combinations will give Sandeep the greatest total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
Refer to the above graph to answer this question.Which of the following combinations will give Sandeep the greatest total utility?
A)2 milk and 5 cookies.
B)3 milk and 4 cookies.
C)4 milk and 3 cookies.
D)5 milk and 2 cookies.
E)6 milk and 1 cookie.
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32
The following graph shows the total utility obtained from rice crackers and beer by Carla.
Refer to the above graph to answer this question.If the price of rice crackers are $2,beer is $3,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)1 cracker and 4 beers.
B)2 crackers and 3 beers.
C)3 crackers and 3 beers.
D)4 crackers and 2 beers.
E)5 crackers and 1 beer.
Refer to the above graph to answer this question.If the price of rice crackers are $2,beer is $3,and Carla has a budget of $14,how much of each will she purchase if she wishes to maximize her total utility?
A)1 cracker and 4 beers.
B)2 crackers and 3 beers.
C)3 crackers and 3 beers.
D)4 crackers and 2 beers.
E)5 crackers and 1 beer.
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33
The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be her optimal purchase?
A)0 muffin and 5 grapefruit.
B)1 muffin and 3 grapefruit.
C)2 muffins and 1 grapefruit.
D)3 muffins and 0 grapefruit.
E)3 muffins and 1 grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be her optimal purchase?
A)0 muffin and 5 grapefruit.
B)1 muffin and 3 grapefruit.
C)2 muffins and 1 grapefruit.
D)3 muffins and 0 grapefruit.
E)3 muffins and 1 grapefruit.
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34
The following table shows Pierre's utility for bagels and cider.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be the total utility of his optimal purchase?
A)9 utils.
B)10 utils.
C)21 utils.
D)87 utils.
E)97 utils.
Refer to the above information to answer this question.If Pierre has a budget of $12 and the price of both bagels and cider are $2,what will be the total utility of his optimal purchase?
A)9 utils.
B)10 utils.
C)21 utils.
D)87 utils.
E)97 utils.
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35
The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be the total utility of her optimal purchase?
A)56 utils.
B)96 utils.
C)145 utils.
D)146 utils.
E)331 utils.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of a muffin is $2 and a grapefruit is $1,what will be the total utility of her optimal purchase?
A)56 utils.
B)96 utils.
C)145 utils.
D)146 utils.
E)331 utils.
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36
The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 7 grapefruit.
B)2 muffin and 6 grapefruit.
C)3 muffins and 5 grapefruit.
D)4 muffins and 4 grapefruit.
E)5 muffins and 3 grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 7 grapefruit.
B)2 muffin and 6 grapefruit.
C)3 muffins and 5 grapefruit.
D)4 muffins and 4 grapefruit.
E)5 muffins and 3 grapefruit.
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37
The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 4 grapefruit.
B)2 muffins and 3 grapefruit.
C)3 muffins and 2 grapefruit.
D)4 muffins and 1 grapefruit.
E)5 muffins.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?
A)1 muffin and 4 grapefruit.
B)2 muffins and 3 grapefruit.
C)3 muffins and 2 grapefruit.
D)4 muffins and 1 grapefruit.
E)5 muffins.
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38
The following table shows Erica's utility for muffins and grapefruit.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)66 utils.
B)126 utils.
C)136 utils.
D)363 utils.
E)423 utils.
Refer to the above information to answer this question.If Erica has a budget of $5 and the price of both muffins and grapefruit are $1,what will be the total utility of her optimal purchase?
A)66 utils.
B)126 utils.
C)136 utils.
D)363 utils.
E)423 utils.
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39
The following table shows Ketta's utility for eggs and bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?
A)0 egg and 8 bacon.
B)1 egg and 6 bacon.
C)2 eggs and 4 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 0 bacon.
Refer to the above information to answer this question.If Ketta has a budget of $8 and the price of eggs are $2 and bacon is $1,what will be her optimal purchase?
A)0 egg and 8 bacon.
B)1 egg and 6 bacon.
C)2 eggs and 4 bacon.
D)3 eggs and 2 bacon.
E)4 eggs and 0 bacon.
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40
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples and 4 bagels.
B)2 apples,2 bagels and 1 cappuccino.
C)2 apples and 2 cappuccinos.
D)1 bagel and 2 cappuccinos.
E)3 bagels and 1 cappuccino.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples and 4 bagels.
B)2 apples,2 bagels and 1 cappuccino.
C)2 apples and 2 cappuccinos.
D)1 bagel and 2 cappuccinos.
E)3 bagels and 1 cappuccino.
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41
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples,2 bagels and 2 cappuccinos.
B)2 apples,4 bagels and 1 cappuccino.
C)4 apples,1 bagel and 2 cappuccinos.
D)4 apples,3 bagels and 1 cappuccino.
E)4 apples and 5 bagels.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.How should she allocate her spending so as to maximize her total utility?
A)2 apples,2 bagels and 2 cappuccinos.
B)2 apples,4 bagels and 1 cappuccino.
C)4 apples,1 bagel and 2 cappuccinos.
D)4 apples,3 bagels and 1 cappuccino.
E)4 apples and 5 bagels.
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42
The following table shows Mia's $ marginal utility for litres of soya milk:
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?
A)0.
B)4 litres.
C)5 litres.
D)6 litres.
E)Cannot be determined.
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,what is the maximum quantity that Mia might purchase?
A)0.
B)4 litres.
C)5 litres.
D)6 litres.
E)Cannot be determined.
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43
The following table shows Mia's $ marginal utility for litres of soya milk:
If the price of soya milk is $8 per litre,what is the maximum number of litres that Mia will buy?
A)0.
B)1.
C)2.
D)3.
E)7.
If the price of soya milk is $8 per litre,what is the maximum number of litres that Mia will buy?
A)0.
B)1.
C)2.
D)3.
E)7.
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44
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
What is meant by the term consumer surplus?
A)It is the difference between the actual price of a product and its real value.
B)It is the surplus which consumers receive from a product as a result of a drop in its price.
C)It is the difference between what the consumer is willing to pay and the actual price of the product.
D)It is the difference between the price which consumers pay for a product and the actual costs of production.
What is meant by the term consumer surplus?
A)It is the difference between the actual price of a product and its real value.
B)It is the surplus which consumers receive from a product as a result of a drop in its price.
C)It is the difference between what the consumer is willing to pay and the actual price of the product.
D)It is the difference between the price which consumers pay for a product and the actual costs of production.
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45
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
In which book is the diamond-water paradox first mentioned?
A)Marx's Das Kapital.
B)Keynes's General Theory.
C)Ricardo's Principles of Political Economy and Taxation.
D)Adam Smith's Wealth of Nations.
E)Marshall's Principles of Economics.
In which book is the diamond-water paradox first mentioned?
A)Marx's Das Kapital.
B)Keynes's General Theory.
C)Ricardo's Principles of Political Economy and Taxation.
D)Adam Smith's Wealth of Nations.
E)Marshall's Principles of Economics.
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46
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)393 utils.
B)408 utils.
C)500 utils.
D)548 utils.
E)636 utils.
Refer to the above information to answer this question.Suppose that Maria only has $5 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)393 utils.
B)408 utils.
C)500 utils.
D)548 utils.
E)636 utils.
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47
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
Refer to the above information to answer this question.If cranberry juice is free,how many glasses will she consume?
A)0 glasses.
B)10 glasses.
C)11 glasses.
D)13 glasses.
E)Cannot be determined.
Refer to the above information to answer this question.If cranberry juice is free,how many glasses will she consume?
A)0 glasses.
B)10 glasses.
C)11 glasses.
D)13 glasses.
E)Cannot be determined.
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48
The following table shows Mia's $ marginal utility for litres of soya milk:
If the price of soya milk is $2 per litre,what is the maximum number of litres that Mia will buy?
A)1.
B)3.
C)4.
D)6.
E)7.
If the price of soya milk is $2 per litre,what is the maximum number of litres that Mia will buy?
A)1.
B)3.
C)4.
D)6.
E)7.
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49
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?
A)The marginal utility from employment dollars is greater than that from investment dollars.
B)The marginal utility from employment dollars is less than that from investment dollars.
C)The consumer surplus derived from employment income is greater than that from investment income.
D)The consumer surplus derived from employment income is smaller than that from investment income.
In many countries,income earned from financial investments is taxed at a higher rate than income earned from employment.What might explain this?
A)The marginal utility from employment dollars is greater than that from investment dollars.
B)The marginal utility from employment dollars is less than that from investment dollars.
C)The consumer surplus derived from employment income is greater than that from investment income.
D)The consumer surplus derived from employment income is smaller than that from investment income.
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50
The following table shows Mia's $ marginal utility for litres of soya milk:
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,how much consumer surplus will Mia receive as a result of her purchases?
A)0.
B)$1.
C)$15.
D)$35.
E)Cannot be determined.
Refer to the above table to answer this question.Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1,how much consumer surplus will Mia receive as a result of her purchases?
A)0.
B)$1.
C)$15.
D)$35.
E)Cannot be determined.
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51
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
Refer to the above information to answer this question.If the price of cranberry juice is 80 cents a glass,how much consumer surplus will she receive as a result of her purchases?
A)0.
B)$0.80.
C)$13.60.
D)$14.40.
E)Cannot be determined.
Refer to the above information to answer this question.If the price of cranberry juice is 80 cents a glass,how much consumer surplus will she receive as a result of her purchases?
A)0.
B)$0.80.
C)$13.60.
D)$14.40.
E)Cannot be determined.
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52
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
According to consumer research,what happens to the proportion of disposable income which is spent by Canadians on the various product groups as the level of income increases?
A)The fraction spent on both food and travel increases whereas the amount spent on shelter decreases.
B)The fraction spent on both food and shelter decreases whereas the amount spent on travel increases.
C)The fraction spent on both food and travel decreases whereas the amount spent on shelter increases.
D)The fraction spent on food decreases whereas the amount spent on both travel and shelter increases.
According to consumer research,what happens to the proportion of disposable income which is spent by Canadians on the various product groups as the level of income increases?
A)The fraction spent on both food and travel increases whereas the amount spent on shelter decreases.
B)The fraction spent on both food and shelter decreases whereas the amount spent on travel increases.
C)The fraction spent on both food and travel decreases whereas the amount spent on shelter increases.
D)The fraction spent on food decreases whereas the amount spent on both travel and shelter increases.
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53
Refer to the graph above to answer this question.At what quantity would this consumer maximize her total utility?
A)5.
B)9.
C)10.
D)18.
E)Cannot be determined.
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54
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
If a consumer buys more than one unit of a product,which of the following statements is true?
A)The value of the last unit purchased must be greater than the value of the previous units,otherwise it would not be bought.
B)The consumer rates the value of each unit equally,otherwise she would not buy more of the item.
C)The value of the last unit purchased is always less than the value of the previous units.
D)It is the value of the first unit purchased which determines the total number of units which will be purchased.
If a consumer buys more than one unit of a product,which of the following statements is true?
A)The value of the last unit purchased must be greater than the value of the previous units,otherwise it would not be bought.
B)The consumer rates the value of each unit equally,otherwise she would not buy more of the item.
C)The value of the last unit purchased is always less than the value of the previous units.
D)It is the value of the first unit purchased which determines the total number of units which will be purchased.
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55
The following table shows Mia's $ marginal utility for litres of soya milk:
Refer to the above table to answer this question.Suppose that soya milk is free,how much will Mia consume?
A)0.
B)4 litres.
C)5 litres.
D)7 litres.
E)Cannot be determined.
Refer to the above table to answer this question.Suppose that soya milk is free,how much will Mia consume?
A)0.
B)4 litres.
C)5 litres.
D)7 litres.
E)Cannot be determined.
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56
Refer to the graph above to answer this question.What is the maximum price that would be paid by this consumer,assuming that partial units cannot be purchased?
A)$9.
B)$10.
C)$16.
D)$18.
E)Cannot be determined.
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57
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Assume that Gina is allocating her budget optimally between two products.If the MU of product X is 40 and its price is $8,what must be the price of product Y if its MU is 60?
A)$7.50.
B)$12.
C)$16.
D)$40.
E)$300.
Assume that Gina is allocating her budget optimally between two products.If the MU of product X is 40 and its price is $8,what must be the price of product Y if its MU is 60?
A)$7.50.
B)$12.
C)$16.
D)$40.
E)$300.
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58
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)436 utils.
B)508 utils.
C)500 utils.
D)526 utils.
E)548 utils.
Refer to the above information to answer this question.Suppose that Maria has $7 to spend on lunch.If she allocates her spending so as to maximize her total utility,what will be her total utility?
A)436 utils.
B)508 utils.
C)500 utils.
D)526 utils.
E)548 utils.
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59
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
Refer to the above information to answer this question.If the price of cranberry juice is 80 cents per glass,how many glasses will she purchase?
A)3 glasses.
B)8 glasses.
C)9 glasses.
D)10 glasses.
E)Cannot be determined.
Refer to the above information to answer this question.If the price of cranberry juice is 80 cents per glass,how many glasses will she purchase?
A)3 glasses.
B)8 glasses.
C)9 glasses.
D)10 glasses.
E)Cannot be determined.
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60
Maria is considering her lunch purchase.Unfortunately,the deli doesn't have a very extensive menu: apples at $0.50 each,bagels at $1 each,and cappuccino at $2 each.Her utility from each is shown in the table below.
Why does the demand curve slope downward?
A)Since the marginal utility increases with increased consumption,people will be eager to buy more at lower prices.
B)Since the marginal utility decreases with increased consumption,the price must fall in order to induce people to buy more.
C)Since total utility increases with increased consumption,a lower price is necessary to encourage increased production.
D)Lower prices mean a lower consumer surplus which will encourage increased consumption.
Why does the demand curve slope downward?
A)Since the marginal utility increases with increased consumption,people will be eager to buy more at lower prices.
B)Since the marginal utility decreases with increased consumption,the price must fall in order to induce people to buy more.
C)Since total utility increases with increased consumption,a lower price is necessary to encourage increased production.
D)Lower prices mean a lower consumer surplus which will encourage increased consumption.
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61
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,what would be their maximum total revenue?
A)$550.
B)$595.
C)$625.50.
D)$636.
E)$670.
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,what would be their maximum total revenue?
A)$550.
B)$595.
C)$625.50.
D)$636.
E)$670.
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62
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $120 per unit,and Lisa has $720 to spend,how many units of each would she purchase?
A)6 water.
B)4 water and 2 diamonds.
C)3 water and 3 diamonds.
D)2 water and 3 diamonds.
E)2 water and 4 diamonds.
Refer to the above information to answer this question.If the price of both water and diamonds is $120 per unit,and Lisa has $720 to spend,how many units of each would she purchase?
A)6 water.
B)4 water and 2 diamonds.
C)3 water and 3 diamonds.
D)2 water and 3 diamonds.
E)2 water and 4 diamonds.
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63
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total expenditure if the price of each kilogram of blueberries is $2?
A)$2.
B)$4.
C)$6.
D)$12.
E)Cannot be determined.
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total expenditure if the price of each kilogram of blueberries is $2?
A)$2.
B)$4.
C)$6.
D)$12.
E)Cannot be determined.
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64
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,how many units of each would she purchase?
A)5 waters.
B)4 waters and 1 diamond.
C)3 waters and 2 diamonds.
D)2 waters and 3 diamonds.
E)1 water and 4 diamonds.
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,how many units of each would she purchase?
A)5 waters.
B)4 waters and 1 diamond.
C)3 waters and 2 diamonds.
D)2 waters and 3 diamonds.
E)1 water and 4 diamonds.
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65
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total willingness to pay for 6 kilograms of blueberries if the price of each kilogram of blueberries is $2?
A)$2.
B)$18.
C)$6.
D)$12.
E)Cannot be determined.
Refer to the graph above to answer this question.The graph shows Becky's demand for blueberries which can be purchased in any quantities and sold at any price.What is Becky's total willingness to pay for 6 kilograms of blueberries if the price of each kilogram of blueberries is $2?
A)$2.
B)$18.
C)$6.
D)$12.
E)Cannot be determined.
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66
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $700 to spend,how many units of each would she purchase?
A)7 water
B)4 water and 3 diamonds.
C)3 water and 4 diamonds.
D)2 water and 5 diamonds.
E)1 water and 6 diamonds.
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $700 to spend,how many units of each would she purchase?
A)7 water
B)4 water and 3 diamonds.
C)3 water and 4 diamonds.
D)2 water and 5 diamonds.
E)1 water and 6 diamonds.
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67
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,in order to maximize total revenue what would that price be?
A)$5.00.
B)$4.50.
C)$4.00.
D)$3.50.
E)$3.00.
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,in order to maximize total revenue what would that price be?
A)$5.00.
B)$4.50.
C)$4.00.
D)$3.50.
E)$3.00.
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68
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
-What is the correct formula for MCS (marginal consumer surplus)?
A)$MU-price.
B)Price-$MU.
C)$TU-price.
D) TU/price.
E) TU/ quantity.
-What is the correct formula for MCS (marginal consumer surplus)?
A)$MU-price.
B)Price-$MU.
C)$TU-price.
D) TU/price.
E) TU/ quantity.
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69
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
What is the term for the selling of an identical product at a different price to different customers for reasons other than cost?
A)Price discrimination.
B)Product substitution.
C)Marginal utility.
D)Consumer surplus.
What is the term for the selling of an identical product at a different price to different customers for reasons other than cost?
A)Price discrimination.
B)Product substitution.
C)Marginal utility.
D)Consumer surplus.
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70
Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.What is the total revenue of the tennis coach?
A)$20.
B)$30.
C)$80.
D)$110.
E)Cannot be determined.
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71
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
Which of the following statements is correct regarding demand and consumer surplus?
A)The greater the elasticity of demand,the greater will be the consumer surplus.
B)The greater the elasticity of demand,the smaller will be the consumer surplus.
C)The greater the number of substitutes for a product,the greater will be the consumer surplus.
D)The smaller the elasticity of demand,the smaller will be the consumer surplus.
Which of the following statements is correct regarding demand and consumer surplus?
A)The greater the elasticity of demand,the greater will be the consumer surplus.
B)The greater the elasticity of demand,the smaller will be the consumer surplus.
C)The greater the number of substitutes for a product,the greater will be the consumer surplus.
D)The smaller the elasticity of demand,the smaller will be the consumer surplus.
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72
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize total revenue what price should be charged to type A,type B and type O respectively?
A)$3,$3 and $4.
B)$3,$4 and $4.
C)$3,$4 and $5.
D)$3.50,$4 and $4.50.
E)$4,$4.50 and $5.
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize total revenue what price should be charged to type A,type B and type O respectively?
A)$3,$3 and $4.
B)$3,$4 and $4.
C)$3,$4 and $5.
D)$3.50,$4 and $4.50.
E)$4,$4.50 and $5.
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73
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,what would be the total revenue received?
A)$550.
B)$595.
C)$625.50
D)$636.
E)$670.
Refer to the above information to answer this question.If the beer producers charged the same price to all consumers,what would be the total revenue received?
A)$550.
B)$595.
C)$625.50
D)$636.
E)$670.
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74
Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.Suppose the coach provides lessons to the children only.What is the amount of the consumer surplus of the children taking the tennis lessons?
A)$20.
B)$50.
C)$120.
D)$160.
E)Cannot be determined.
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75
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
What is price discrimination?
A)The selling of different products to the same customer at different prices.
B)The selling of an identical product to different customers at the same price.
C)The selling of an identical product to different customers at different prices.
D)The selling of different products to different customers at different prices.
What is price discrimination?
A)The selling of different products to the same customer at different prices.
B)The selling of an identical product to different customers at the same price.
C)The selling of an identical product to different customers at different prices.
D)The selling of different products to different customers at different prices.
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76
In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize revenue,which of the following statements is correct?
A)The consumer group with the highest price elasticity of demand should be charged the highest price.
B)The consumer group with the highest price elasticity of demand should be charged the lowest price.
C)The consumer group with the lowest price elasticity of demand should be charged the lowest price.
D)The consumer group which should be charged the highest price depends upon which has the smallest marginal utility.
Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize revenue,which of the following statements is correct?
A)The consumer group with the highest price elasticity of demand should be charged the highest price.
B)The consumer group with the highest price elasticity of demand should be charged the lowest price.
C)The consumer group with the lowest price elasticity of demand should be charged the lowest price.
D)The consumer group which should be charged the highest price depends upon which has the smallest marginal utility.
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77
What is marginal utility?
A)It is the total satisfaction resulting from consuming a product.
B)It is the total satisfaction resulting from consuming all products.
C)It is the additional satisfaction resulting from consuming one more unit of all products.
D)It is the additional satisfaction resulting from consuming one more unit of a product.
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78
The following table shows the utility (measured in dollars)which Lisa derives from water (in 50 litre drums)and diamonds (uncut 1 carat stones).
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,what is the value of her total consumer surplus if she purchases the optimal quantity?
A)0.
B)$375.
C)$620.
D)$875.
E)$1,120.
Refer to the above information to answer this question.If the price of both water and diamonds is $100 per unit,and Lisa has $500 to spend,what is the value of her total consumer surplus if she purchases the optimal quantity?
A)0.
B)$375.
C)$620.
D)$875.
E)$1,120.
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79
Refer to the graph above to answer this question.The graph shows a tennis coach charges $20 per hour for tennis lessons for adults and $10 per hour for tennis lessons for children.The tennis coach is practicing:
A)Peak load pricing
B)Three part pricing
C)Price discrimination
D)Bundling
E)All of the choices are correct.
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80
Suppose that Irina is prepared to pay a maximum of $2.40 for her first glass of cranberry juice,but for each subsequent glass she is only prepared to pay 20 cents less than the previous one.
What is the term for the difference between the consumer's evaluation of a product and the price which is paid for it?
A)Price discrimination.
B)Price elasticity of demand.
C)Consumer indifference.
D)Consumer surplus.
What is the term for the difference between the consumer's evaluation of a product and the price which is paid for it?
A)Price discrimination.
B)Price elasticity of demand.
C)Consumer indifference.
D)Consumer surplus.
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