Question 1

When a consumer spends income so that the ratio of marginal utilities(MUs) of all goods purchased equals the ratio of their prices, the consumeris

Accepted Answer

The answer of When a consumer spends income so that...

Question 2

If Dalene's marginal benefit from consuming another cookie is greater thanthe price of the cookie, then

Accepted Answer

If Dalene's marginal benefit from consuming another cookie is greater than the price of the cookie, it means that she will gain more satisfaction from consuming the additional cookie than the cost of buying it. Hence, purchasing the additional cookie will increase her total satisfaction. Therefore, D is the best choice.

Question 3

When income is allocated to two goods, x and y, consumer equilibriumoccurs when

Accepted Answer

Consumer equilibrium occurs when the marginal utility per dollar spent is equal for the two goods, which is expressed as MUx/ Px = MUy/Py. This also ensures that the budget is exhausted. Therefore, the correct choice is E, which satisfies both conditions for consumer equilibrium.

Question 4

If Ellie Mae spends her income on possum and biscuits and the price ofpossum is three times the price of biscuits, then when Ellie Mae maximizestotal utility, she will buy

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The answer of If Ellie Mae spends her income on...

Question 5

If a good is offered to you free of charge, then you

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The answer of If a good is offered to you...

Question 6

Assume that you allocate your income to calzones and juice and that youhave not yet spent your entire budget.If the marginal utility of a fourthcalzone is 100 and the marginal utility of a third glass of juice is 50, youwould

Accepted Answer

In order to make the best choice, you need to consider the relative prices of calzones and juice. If the price of a calzone is higher than the price of a glass of juice, then it may be more beneficial to choose the juice, even though its marginal utility is lower. Conversely, if the price of a calzone is lower than the price of a glass of juice, then it may be more beneficial to choose the calzone, even though its marginal utility is higher. Therefore, choice D is the best option.

Question 7

If the price of a good is 0, a consumer will

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The answer of If the price of a good is...

Question 8

Suppose Enid could increase her total utility by purchasing one more bookand one less video rental.Which of the following is true?

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The answer of Suppose Enid could increase her total utility...

Question 9

If the marginal utility of each good a consumer buys does not diminish butremains constant, we should see consumers

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The answer of If the marginal utility of each good...

Question 10

.A free good (price = $0) will be consumed up to the point at which itsmarginal utility is zero.

Accepted Answer

This is the law of diminishing marginal utility, which states that the more of a good a person consumes, the less satisfaction they will receive from each additional unit consumed until the point of zero marginal utility is reached. For a free good, consumers will continue to consume it up to the point of zero marginal utility because there is no opportunity cost to doing so.

Question 11

Suppose you go to a wedding reception that has free drinks.What is likelyto be the marginal utility of the last drink you had?

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The answer of Suppose you go to a wedding reception...

Question 12

Assume that you allocate your income to calzones and juice and that youhave not yet spent your entire budget.If the marginal utility of a fourthcalzone is 100 and the marginal utility of a third glass of juice is 50, youwould

Accepted Answer

The answer of Assume that you allocate your income to...

Question 13

A consumer maximizes utility when the marginal utilities of all goods

Accepted Answer

The answer of A consumer maximizes utility when the marginal...

Question 14

A utility­maximizing consumer equalizes marginal utilities across all goods.

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The answer of A utility­maximizing consumer equalizes marginal utilities across...

Question 15

Exhibit 6­6  Consider Exhibit 6­6.Which of the following best describes what it revealsabout total and marginal utility for baseball game tickets?

Accepted Answer

The exhibit shows that at first, as the person consumes more baseball game tickets, their total utility increases at a decreasing rate because marginal utility is positive but decreasing. Eventually, marginal utility becomes negative and starts to pull total utility down. This is consistent with choice D.

Question 16

Suppose that for Jason the marginal utility of $50­per­serving caviar is 100and the marginal utility of $1­per­serving popcorn is 10.For his snack,Jason should buy

Accepted Answer

The answer of Suppose that for Jason the marginal utility...

Question 17

The fact that the washroom usually has paper towels left (free to theconsumer) suggests that the marginal utility of paper towels quicklydiminishes to 0 for each consumer.

Accepted Answer

If consumers were consistently finding high levels of satisfaction from using paper towels in the washroom, they would likely take more than they need and there would be a shortage or the establishment would need to charge for them. However, the fact that there are usually paper towels left suggests that the marginal utility, or additional satisfaction gained from using each additional paper towel, quickly diminishes to zero, meaning consumers only take what they need and no more.

Question 18

In Exhibit 6­3, the marginal utility of consuming the first scone is

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The answer of  In Exhibit 6­3, the marginal utility...

Question 19

Consumers must understand the law of diminishing marginal utility in orderto maximize their satisfaction.

Accepted Answer

The answer of Consumers must understand the law of diminishing...

Question 20

As long as scarcity exists,

Accepted Answer

Since scarcity exists, consumers must allocate their limited income between various products. Therefore, both income and product prices must be considered in utility maximization.

Quiz 6: Consumer Choice and Demand

When a consumer spends income so that the ratio of marginal utilities(MUs) of all goods purchased equals the ratio of their prices, the consumeris

If Dalene's marginal benefit from consuming another cookie is greater thanthe price of the cookie, then

When income is allocated to two goods, x and y, consumer equilibriumoccurs when

If Ellie Mae spends her income on possum and biscuits and the price ofpossum is three times the price of biscuits, then when Ellie Mae maximizestotal utility, she will buy

If a good is offered to you free of charge, then you

Assume that you allocate your income to calzones and juice and that youhave not yet spent your entire budget.If the marginal utility of a fourthcalzone is 100 and the marginal utility of a third glass of juice is 50, youwould

If the price of a good is 0, a consumer will

Suppose Enid could increase her total utility by purchasing one more bookand one less video rental.Which of the following is true?

If the marginal utility of each good a consumer buys does not diminish butremains constant, we should see consumers

.A free good (price = $0) will be consumed up to the point at which itsmarginal utility is zero.

Suppose you go to a wedding reception that has free drinks.What is likelyto be the marginal utility of the last drink you had?

Assume that you allocate your income to calzones and juice and that youhave not yet spent your entire budget.If the marginal utility of a fourthcalzone is 100 and the marginal utility of a third glass of juice is 50, youwould

A consumer maximizes utility when the marginal utilities of all goods

A utilitymaximizing consumer equalizes marginal utilities across all goods.

Exhibit 66 Consider Exhibit 66.Which of the following best describes what it revealsabout total and marginal utility for baseball game tickets?

Suppose that for Jason the marginal utility of $50perserving caviar is 100and the marginal utility of $1perserving popcorn is 10.For his snack,Jason should buy

The fact that the washroom usually has paper towels left (free to theconsumer) suggests that the marginal utility of paper towels quicklydiminishes to 0 for each consumer.

In Exhibit 63, the marginal utility of consuming the first scone is

Consumers must understand the law of diminishing marginal utility in orderto maximize their satisfaction.

As long as scarcity exists,

Quiz 6: Consumer Choice and Demand

When a consumer spends income so that the ratio of marginal utilities(MUs) of all goods purchased equals the ratio of their prices, the consumeris

If Dalene's marginal benefit from consuming another cookie is greater thanthe price of the cookie, then

When income is allocated to two goods, x and y, consumer equilibriumoccurs when

If Ellie Mae spends her income on possum and biscuits and the price ofpossum is three times the price of biscuits, then when Ellie Mae maximizestotal utility, she will buy

If a good is offered to you free of charge, then you

Assume that you allocate your income to calzones and juice and that youhave not yet spent your entire budget.If the marginal utility of a fourthcalzone is 100 and the marginal utility of a third glass of juice is 50, youwould

If the price of a good is 0, a consumer will

Suppose Enid could increase her total utility by purchasing one more bookand one less video rental.Which of the following is true?

If the marginal utility of each good a consumer buys does not diminish butremains constant, we should see consumers

.A free good (price = $0) will be consumed up to the point at which itsmarginal utility is zero.

Suppose you go to a wedding reception that has free drinks.What is likelyto be the marginal utility of the last drink you had?

Assume that you allocate your income to calzones and juice and that youhave not yet spent your entire budget.If the marginal utility of a fourthcalzone is 100 and the marginal utility of a third glass of juice is 50, youwould

A consumer maximizes utility when the marginal utilities of all goods

A utility­maximizing consumer equalizes marginal utilities across all goods.

Exhibit 6­6 Consider Exhibit 6­6.Which of the following best describes what it revealsabout total and marginal utility for baseball game tickets?

Suppose that for Jason the marginal utility of $50­per­serving caviar is 100and the marginal utility of $1­per­serving popcorn is 10.For his snack,Jason should buy

The fact that the washroom usually has paper towels left (free to theconsumer) suggests that the marginal utility of paper towels quicklydiminishes to 0 for each consumer.

In Exhibit 6­3, the marginal utility of consuming the first scone is

Consumers must understand the law of diminishing marginal utility in orderto maximize their satisfaction.

As long as scarcity exists,

A utilitymaximizing consumer equalizes marginal utilities across all goods.

Exhibit 66 Consider Exhibit 66.Which of the following best describes what it revealsabout total and marginal utility for baseball game tickets?

Suppose that for Jason the marginal utility of $50perserving caviar is 100and the marginal utility of $1perserving popcorn is 10.For his snack,Jason should buy

In Exhibit 63, the marginal utility of consuming the first scone is