Question 1

Melika spends all her income on two goods, magazines and carry-out lunches.The price of a magazine is $5, and the price of a carry-out lunch is $7.At the current consumption bundle, the marginal utility of magazines is 10, and the marginal utility of carry-out lunches is 21.To maximize utility given her income, Melika should:
A.increase her consumption of carry-out lunches and decrease her consumption of magazines.
B.increase her consumption of magazines and decrease her consumption of carry-out lunches.
C.continue to consume the current bundle.
D.consume equal amounts of magazines and carry-out lunches.

Accepted Answer

The answer of Melika spends all her income on two...

Question 2

Juan spends all of his income on baseball cards and candy.At his current consumption bundle, the marginal utility of baseball cards is 20 and the marginal utility of candy is 10.If the price of baseball cards is $10, and the price of candy is $2,
A.Juan should increase his consumption of baseball cards and decrease his consumption of candy.
B.Juan should increase his consumption of candy and decrease his consumption of baseball cards.
C.Juan is maximizing his utility, and he should continue to consume the current bundle.
D.Juan should consume equal amounts of baseball cards and candy.

Accepted Answer

The answer of Juan spends all of his income on...

Question 3

If Minh purchases a combination of dish soap and floor wax such that MUDish soap/PDish soap = 50 and MUFloor wax/PFloor wax = 30, to maximize utility, the consumer should buy:
A.fewer bottles of soap and floor wax
B..more bottles of soap and floor wax.
C.more bottles of soap and fewer bottles of floor wax.
D.fewer bottles of soap and more bottles of floor wax.

Accepted Answer

The answer of If Minh purchases a combination of dish...

Question 4

At the optimal consumption bundle:
A.the marginal utility of all goods consumed is equal.
B.the marginal utility per dollar spent is equal for all goods consumed.
C.the price of all goods consumed is equal.
D.total utility from all goods consumed is equal.

Accepted Answer

The answer of At the optimal consumption bundle:
A.the marginal utility...

Question 5

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.If the price of M&Ms increases to $3 per bag, Andy's marginal utility per dollar for each bag of M&Ms will 
A.increase.
B.decrease.
C.remain constant.
D.fluctuate randomly.

Accepted Answer

The answer of   (Table: Marginal Utility per Dollar...

Question 6

Jenny believes that spending one hour studying for economics will increase her grade by 20 points.Studying for a second hour will increase her grade by 10 points.She also believes that studying for an hour for history will increase her grade by 15 points, but spending a second hour will increase her grade by only 5 points.Jenny has two hours to study.If Jenny wants to maximize her scores, what should she do?
A.study 1 hour for economics and 1 hour for history
B.study 2 hours for economics and 0 hours for history
C.study 0 hours for economics and 2 hours for history
D.study 1 hour for economics and 0 hours for history

Accepted Answer

The answer of Jenny believes that spending one hour studying...

Question 7

Suzy knows she has maximized her utility, because she is on her budget constraint and:
A.her consumption of cameras equals her consumption of coffee.
B.what she spends on cameras equals what she spends on coffee.
C.MUCameras/PCameras = MUCoffee/PCoffee.
D..MUCameras = MUCoffee.

Accepted Answer

The answer of Suzy knows she has maximized her utility,...

Question 8

Assume that Maia spends all her income on halvah (X) and pomegranates (Y) and is purchasing the optimal consumption bundle.If MUX/MUY = 3 and the price of halvah is $12, then the price of pomegranates is:
A.$36.
B.$4.
C.$12.
D.$3.

Accepted Answer

The answer of Assume that Maia spends all her income...

Question 9

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.If the price of M&Ms decreases to $1 per bag, Andy' marginal utility per dollar for each bag of M&Ms will 
A.increase.
B.decrease.
C.remain constant.
D.fluctuate randomly.

Accepted Answer

The answer of   (Table: Marginal Utility per Dollar...

Question 10

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the fourth bag of M&Ms is:
A.1
B.2
C.7.5
D.15

Accepted Answer

The answer of (Table: Marginal Utility per Dollar of M&Ms)...

Question 11

Benny spends all of his money buying wine and cheese.The marginal utility of the last bottle of wine he bought is 60, and the marginal utility of the last block of cheese he bought is 30.The price of wine is $3, and the price of cheese is $2.Benny:
A.is buying wine and cheese in the utility-maximizing amounts.
B.should buy more wine and less cheese.
C.should buy more cheese and less wine.
D.is spending too much money on wine and cheese.

Accepted Answer

The answer of Benny spends all of his money buying...

Question 12

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the third bag of M&Ms is: 
A.1
B.1.5
C.3
D.13

Accepted Answer

The answer of   (Table: Marginal Utility per Dollar...

Question 13

If a consumer purchases a combination of coffee and football tickets such that MUCoffee/PCoffee = 20 and
MUFootball tickets/PFootball tickets = 10, to maximize utility, the consumer should buy:
A.less coffee and more football tickets.
B.more coffee and fewer football tickets.
C.more coffee and more football tickets
D.less coffee and fewer football tickets.

Accepted Answer

The answer of If a consumer purchases a combination of...

Question 14

Diego spends all of his income on milkshakes and French fries.At his current consumption levels the marginal utility of one milkshake and the marginal utility of one order of French fries are equal.According to the optimal consumption rule:
A.Diego is maximizing his utility.
B.Diego is maximizing his utility only if one milkshake and one order of French fries have the same price.
C.Diego should buy more milkshakes and fewer fries if a milkshake costs more than an order of fries.
D.Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both.

Accepted Answer

The answer of Diego spends all of his income on...

Question 15

Sasha buys a warm soda and a slice of cold pizza.The marginal utility from a soda is 40, and the price of the soda is $1.The marginal utility from a slice of pizza is 80.Since Sasha always chooses the utility-maximizing choice, we know the price of a slice of pizza must be:
A.$20.
B.$2.
C.$1.
D.$0.50.

Accepted Answer

The answer of Sasha buys a warm soda and a...

Question 16

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the second bag of M&Ms is:
A.16
B.10
C.5
D.2

Accepted Answer

The answer of (Table: Marginal Utility per Dollar of M&Ms)...

Question 17

Joseph consumes pizza and soda.He is currently consuming three units of pizza and two units of soda.The price of pizza is $5 and the price of soda is $1.If he is consuming the optimal consumption bundle and his marginal utility of pizza is 50, then his marginal utility of soda is:
A.50.
B.10.
C.5.
D.impossible to determine unless you know Joseph's income.

Accepted Answer

The answer of Joseph consumes pizza and soda.He is currently...

Question 18

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the fifth bag of M&Ms is:
A.0
B.0.5
C.1
D.8

Accepted Answer

The answer of (Table: Marginal Utility per Dollar of M&Ms)...

Question 19

Brad spends all of his income on two goods: cameras and coffee.He is purchasing the optimal consumption bundle that maximizes his utility given his budget constraint.At the optimal consumption bundle, which of the following statements is correct?
A.If the price of cameras is higher than the price of coffee, then the marginal utility of cameras is less than the marginal utility of coffee.
B.If the price of cameras is lower than the price of coffee, then the marginal utility of cameras is more than the marginal utility of coffee.
C.If the price of cameras is equal to the price of coffee, then the marginal utility of cameras is equal to the marginal utility of coffee.
D.The prices of cameras and coffee and their marginal utilities are unrelated.

Accepted Answer

The answer of Brad spends all of his income on...

Question 20

Suppose Ivy buys only two things, books and coffee, and receives the same satisfaction from the last book bought as she did from the last coffee bought.Books cost twice as much as coffee, and she has spent all her money.If she is trying to maximize her utility,
A.Ivy should buy more books and less coffee.
B.Ivy should buy more coffee and fewer books.
C.Ivy should buy more coffee and books.
D.Ivy is making the right choice.

Accepted Answer

The answer of Suppose Ivy buys only two things, books...

Quiz 10: The Rational Consumer

At the optimal consumption bundle: A.the marginal utility of all goods consumed is equal. B.the marginal utility per dollar spent is equal for all goods consumed. C.the price of all goods consumed is equal. D.total utility from all goods consumed is equal.

Suzy knows she has maximized her utility, because she is on her budget constraint and: A.her consumption of cameras equals her consumption of coffee. B.what she spends on cameras equals what she spends on coffee. C.MUCameras/PCameras = MUCoffee/PCoffee. D..MUCameras = MUCoffee.

Assume that Maia spends all her income on halvah (X) and pomegranates (Y) and is purchasing the optimal consumption bundle.If MUX/MUY = 3 and the price of halvah is $12, then the price of pomegranates is: A.$36. B.$4. C.$12. D.$3.

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the fourth bag of M&Ms is: A.1 B.2 C.7.5 D.15

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the third bag of M&Ms is: A.1 B.1.5 C.3 D.13

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the second bag of M&Ms is: A.16 B.10 C.5 D.2

(Table: Marginal Utility per Dollar of M&Ms) Andy's total utility from eating snack-size bags of M&Ms is given in the table.The price of M&Ms is $2 per bag.Andy's marginal utility per dollar of the fifth bag of M&Ms is: A.0 B.0.5 C.1 D.8