Question 1

The price of a hamburger is $1, and the price of a movie is $6. The consumer has purchased 2 hamburgers and 2 movies, and her marginal utility from the second hamburger is 20 and from the second movie is 120. The consumer has an income of $21. This combination of goods

Accepted Answer

The consumer has spent $14 ($2 on hamburgers and $12 on movies) out of her $21 income, so she has not spent all her money.

Question 2

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $1. The price of Good B is $10. If John wants to maximize his utility he should

Accepted Answer

John should allocate more of his spending on Good A and less on Good B. This is because the marginal utility per dollar spent on Good A is greater than the marginal utility per dollar spent on Good B. Since the price of Good A is only $1, John can buy more units of it for the same amount of money compared to Good B which costs $10 per unit. By reallocating his spending towards Good A, John can increase his total utility.

Question 3

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The price of Good B is $5. If John wants to maximize his utility he should

Accepted Answer

The answer of John is currently spending all of his...

Question 4

If the price of X is $3 and the price of Y is $5, then, in a consumer optimum,

Accepted Answer

In consumer optimum, the marginal utility per dollar spent on each good should be equal. Therefore, the marginal utility of Y divided by its price ($5) should equal the marginal utility of X divided by its price ($3). This implies the marginal utility of Y must be 67% more than the marginal utility of X to balance the higher price.

Question 5

The price of hamburgers is $2 and the price of movies is $4. The consumer has $16 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods

Accepted Answer

The answer of The price of hamburgers is $2 and...

Question 6

-Refer to the above table. If the price of a hamburger is $2, the price of a Broadway Show is $60, and the consumer has $190, what is the consumer optimum?

Accepted Answer

The consumer can buy 5 hamburgers ($10) and 3 Broadway shows ($180) for a total of $190, maximizing their budget.

Question 7

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The price of Good B is $1. If John wants to maximize his utility he should

Accepted Answer

John should increase the consumption of Good B because the marginal utility per dollar spent on Good B (10 utils/$1 = 10 utils per dollar) is higher than that of Good A (20 utils/$10 = 2 utils per dollar).

Question 8

The price of a hamburger is $1 and the price of a movie is $4 and the consumer has $10. A consumer has purchased 2 hamburgers and 2 movies, receiving 25 units of utility for the second hamburger and 100 units of utility for the second movie. The set of goods

Accepted Answer

The consumer has spent their entire budget of $10 and has achieved the highest level of satisfaction (utility) possible given the prices of the two goods. Additionally, the marginal utility per dollar spent on the last unit of each good is the same, indicating that the consumer has allocated their budget in the most efficient way possible. Therefore, this set of goods is an optimum.

Question 9

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The price of Good B is $1. If John wants to maximize his utility he should

Accepted Answer

To maximize utility, John should equalize the marginal utility per dollar spent on each good. Currently, Good A provides 5 utils per dollar (20 utils / $4) and Good B provides 10 utils per dollar (10 utils / $1). John should consume more of Good B and less of Good A to equalize the marginal utility per dollar spent.

Question 10

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $2. The price of Good B is $5. If John wants to maximize his utility he should

Accepted Answer

To maximize utility, John should equalize the marginal utility per dollar spent on each good. Currently, Good A provides 10 utils per dollar (20 utils / $2), and Good B provides 2 utils per dollar (10 utils / $5). John should increase consumption of Good A and decrease consumption of Good B to maximize utility.

Question 11

A consumer's optimum is found when

Accepted Answer

A consumer's optimum is achieved when they are maximizing their total utility given their budget constraint, or limited income. This happens when the marginal utility per dollar spent (MU/$) is equal for all goods. In other words, the consumer is allocating their income in such a way that the additional utility gained from spending one more dollar on any good is the same across all goods. This is the point where the consumer is getting the most satisfaction or utility from their purchases without overspending. Therefore, option B is correct.

Question 12

The price of a hamburger is $1 and the price of a movie is $6 and the consumer has $14. A consumer has purchased 2 hamburgers and 2 movies, receiving 20 units of utility for the second hamburger and 100 units of utility for the second movie. The set of goods

Accepted Answer

The consumer has spent $14, but the marginal utility per dollar spent is higher for hamburgers (20 units per $1) than for movies (100 units per $6, or approximately 16.67 units per $1), indicating that reallocating spending could increase total utility.

Question 13

A consumer has spent all of his income on hamburgers and movies. The price of a hamburger is $1 and the price of a movie is $6. The marginal utility of the last hamburger is 5 and the marginal utility of the last movie is 24. The consumer has

Accepted Answer

The consumer should allocate spending such that the marginal utility per dollar is equal for both goods. Currently, the marginal utility per dollar for hamburgers is 5, and for movies, it is 4 (24/6). Therefore, the consumer should buy more hamburgers and fewer movies to maximize utility.

Question 14

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The price of Good B is $2. If John wants to maximize his utility he should

Accepted Answer

The answer of John is currently spending all of his...

Question 15

The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 30 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods

Accepted Answer

The marginal utility per dollar spent on hamburgers is 15 utils ($30/2) and for movies is 10 utils ($40/4). Since the marginal utility per dollar is higher for hamburgers, the consumer is not maximizing utility.

Question 16

The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods

Accepted Answer

The consumer has spent all of their income and the marginal utility per dollar spent on the last unit of each good is equal (20 utils for the last hamburger and 10 utils for the last movie). Therefore, the consumer has reached an optimum where they are maximizing their utility given their budget constraint.

Question 17

-Refer to the above table. If the price of a hamburger is $2, the price of a Broadway Show is $60, and the consumer has $128, what is the consumer optimum?

Accepted Answer

The answer of 
-Refer to the above table. If the...

Question 18

When Bonnie increases the consumption of Good A and decrease the consumption of Good B, her marginal utility of

Accepted Answer

When Bonnie increases consumption of Good A, the marginal utility of A typically falls due to the law of diminishing marginal utility. Conversely, as she decreases consumption of Good B, the marginal utility of B is likely to increase.

Question 19

The set of goods and services that maximizes the level of satisfaction for each consumer subject to limited income is

Accepted Answer

The concept described in the question is that of consumer optimization, which is defined as the set of goods and services that maximize the level of satisfaction for a consumer subject to limited income. Therefore, the correct answer is A) the consumer optimum. The other options are not directly related to this concept.

Question 20

A consumer's optimum is found when

Accepted Answer

The consumer's optimum is reached when the marginal utility of the last dollar spent on each good is the same. This is because the consumer wants to allocate their income in a way that maximizes their overall satisfaction. If they were to spend more on a good with a lower marginal utility per dollar and less on a good with a higher marginal utility per dollar, they would be giving up satisfaction that they could have gained by reallocating their spending. Therefore, the consumer's optimum is found when they have spent all of their income and the marginal utility of the last dollar spent on each good is equal.

Quiz 20: Consumer Choice

The price of a hamburger is $1, and the price of a movie is $6. The consumer has purchased 2 hamburgers and 2 movies, and her marginal utility from the second hamburger is 20 and from the second movie is 120. The consumer has an income of $21. This combination of goods

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $1. The price of Good B is $10. If John wants to maximize his utility he should

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The price of Good B is $5. If John wants to maximize his utility he should

If the price of X is $3 and the price of Y is $5, then, in a consumer optimum,

The price of hamburgers is $2 and the price of movies is $4. The consumer has $16 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods

-Refer to the above table. If the price of a hamburger is $2, the price of a Broadway Show is $60, and the consumer has $190, what is the consumer optimum?

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The price of Good B is $1. If John wants to maximize his utility he should

The price of a hamburger is $1 and the price of a movie is $4 and the consumer has $10. A consumer has purchased 2 hamburgers and 2 movies, receiving 25 units of utility for the second hamburger and 100 units of utility for the second movie. The set of goods

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The price of Good B is $1. If John wants to maximize his utility he should

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $2. The price of Good B is $5. If John wants to maximize his utility he should

A consumer's optimum is found when

The price of a hamburger is $1 and the price of a movie is $6 and the consumer has $14. A consumer has purchased 2 hamburgers and 2 movies, receiving 20 units of utility for the second hamburger and 100 units of utility for the second movie. The set of goods

A consumer has spent all of his income on hamburgers and movies. The price of a hamburger is $1 and the price of a movie is $6. The marginal utility of the last hamburger is 5 and the marginal utility of the last movie is 24. The consumer has

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The price of Good B is $2. If John wants to maximize his utility he should

The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 30 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods

The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods

-Refer to the above table. If the price of a hamburger is $2, the price of a Broadway Show is $60, and the consumer has $128, what is the consumer optimum?

When Bonnie increases the consumption of Good A and decrease the consumption of Good B, her marginal utility of

The set of goods and services that maximizes the level of satisfaction for each consumer subject to limited income is

A consumer's optimum is found when