Question 1

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = x,then it can be concluded that
A) "x" and "y" are perfect complements.
B) "y" is a "bad".
C) the indifference curves on the x,y graph are upward sloping.
D) the indifference curves on the x,y graph are vertical.

Accepted Answer

The utility function U = x indicates that utility depends solely on the quantity of good x, with no regard for good y. This means that the consumer's satisfaction increases with more of good x and is unaffected by changes in the quantity of good y. Therefore, indifference curves, which represent combinations of goods x and y that give the consumer the same level of utility, will be vertical lines. This is because moving along a vertical line changes the quantity of good y while keeping the quantity of good x constant, which does not affect the consumer's utility according to the given utility function.

Question 2

Clifford lives by the motto "Eat drink and be merry today,for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y",then which of the following best represents Clifford's utility function?
A) U = x - y
B) U = x/y
C) U = x
D) U = y

Accepted Answer

Clifford's motto suggests that he values immediate consumption (represented by "x") more than future consumption (represented by "y"), and may not care at all about tomorrow's consumption. Therefore, his utility function is likely only dependent on today's consumption, which is represented by U = x.

Question 3

If Fred's marginal rate of substitution of salad for pizza equals 5,then
A) he would give up 5 pizzas to get the next salad.
B) he would give up 5 salads to get the next pizza.
C) he will eat five times as much pizza as salad.
D) he will eat five times as much salad as pizza.

Accepted Answer

The marginal rate of substitution (MRS) measures how much of one good a consumer is willing to give up in order to get an additional unit of another good while remaining indifferent (keeping utility constant). In this case, Fred's MRS of salad for pizza is 5, which means he is willing to give up 5 salads to get the next pizza. Therefore, choice B is correct. Choices A, C, and D are not correct because they do not accurately reflect the meaning of the MRS.

Question 4

If Fred's marginal utility of pizza equals 10 and his marginal utility of salad equals 2,then
A) he would give up 5 pizzas to get the next salad.
B) he would give up 5 salads to get the next pizza.
C) he will eat five times as much pizza as salad.
D) he will eat five times as much salad as pizza.

Accepted Answer

Marginal utility measures the additional satisfaction a person receives from consuming one more unit of a good. Since Fred's marginal utility of pizza is 10 and his marginal utility of salad is 2, he would be willing to give up more salads to get the next pizza than he would be willing to give up pizzas to get the next salad. Therefore, he would give up 5 salads to get the next pizza.

Question 5

If the utility function (U)between food (F)and clothing (C)can be represented as U =  ,the marginal rate of substitution of clothing for food equals
A) -C/F.
B) -F/C.
C) - 
D) -

Accepted Answer

The answer of If the utility function (U)between food (F)and...

Question 6

Adrian's total utilities of two consumption bundles are 50 and 100.This implies that
A) the consumer prefers the first bundle.
B) the consumer prefers the second bundle.
C) the consumer likes the second bundle twice as much.
D) the consumer likes the first bundle twice as much.

Accepted Answer

The higher total utility (100 vs. 50) indicates that the consumer prefers the second bundle over the first.

Question 7

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = y,then it can be concluded that
A) "x" and "y" are perfect complements.
B) "x" is a "bad".
C) the indifference curves on the x,y graph are upward sloping.
D) the indifference curves on the x,y graph are horizontal.

Accepted Answer

If the utility for the two goods "x" and "y" can be measured as U = y, it means that the marginal utility of "x" is constant and equal to zero, while the marginal utility of "y" is constant and positive. This implies that the consumer only derives utility from "y" and "x" is irrelevant for his/her satisfaction. Therefore, the indifference curves on the x,y graph are horizontal, indicating that the consumer is indifferent between different levels of "x" as long as "y" remains constant.

Question 8

If the utility function (U)between food (F)and clothing (C)can be represented as U =  ,the marginal utility of food
A) is not positive.
B) does not diminish as food increases.
C) is not affected by the amount clothing.
D) increases as one obtains more clothing.

Accepted Answer

According to the law of diminishing marginal utility, as one consumes more of a good, the marginal utility derived from consuming an additional unit decreases. However, in this utility function, the exponent on the amount of food (e^F) is positive, indicating that the marginal utility of food is increasing as one obtains more food. This means that choice D is the best answer.

Question 9

If Johnny likes homework (H)but hates exercise (E),which of the following might best represent his utility function for homework and exercise? A) U = H + E B) U = H/E C) U = H² + D) U = H² ×

Accepted Answer

The answer of If Johnny likes homework (H)but hates exercise...

Question 10

Draw the indifference curves for rock concerts and food for each of the following:
(a)a typical 17-year-old
(b)a typical 75-year-old

Accepted Answer

The answer of Draw the indifference curves for rock concerts...

Question 11

If two bundles are on the same indifference curve,then
A) the consumer derives the same level of utility from each.
B) the consumer derives the same level of ordinal utility from each but not the same level of cardinal utility.
C) no comparison can be made between the two bundles since utility cannot really be measured.
D) B and C.

Accepted Answer

Indifference curves represent the same level of utility for the consumer. Therefore, if two bundles are on the same indifference curve, the consumer derives the same level of utility from each.

Question 12

Utility is the set of numerical values that
A) yields an absolute level of pleasure from a bundle of goods.
B) reflects the relative ranking of various bundles of goods.
C) describes how much more a consumer prefers one bundle to another.
D) yields a cardinal ranking of bundles.

Accepted Answer

Utility reflects the relative ranking of various bundles of goods rather than an absolute level of pleasure or a cardinal ranking of bundles. It also describes the consumer's preferences between different bundles. Therefore, B is the correct answer.

Question 13

If two goods,"x" and "y",are perfect substitutes,then which of the following best represents the utility function for the two goods? A) U = x + y B) U = x ∗ y C) U = x² + y² D) Any of the above.

Accepted Answer

Since the goods are perfect substitutes, their marginal utility is the same and utility is simply the sum of the quantities consumed of each good. Therefore, the utility function would be U = x + y.

Question 14

Individuals derive utility from picnics,p,and kayak trips,k.Assuming that an individual's utility is U(p,k)= k^0.5p^0.⁵ and income is $100,what is the marginal rate of substitution (MRS)between picnics and kayak trips? A) MRS = 1. B) MRS = -1. C) MRS = - D) There is no substitution because picnics and kayak trips are perfect complements.

Accepted Answer

The answer of Individuals derive utility from picnics,p,and kayak trips,k.Assuming...

Question 15

If the utility for two goods "x" and "y" is measured as U = x + y,then it can be concluded that
A) "x" and "y" are perfect substitutes.
B) "x" and "y" are perfect complements.
C) "x" and "y" are both bads.
D) the indifference curves on the x,y graph will be upward sloping.

Accepted Answer

The utility function U = x + y implies that "x" and "y" are perfect substitutes, since the marginal utility of one good can completely replace the marginal utility of the other good. As a result, the indifference curves will be linear and downward sloping, reflecting the trade-off between the two goods.

Question 16

People view alcohol and marijuana as perfect substitutes.This means that
A) individuals will consume either alcohol or marijuana, but not both, regardless of price.
B) as the price of alcohol decreases, marijuana use decreases.
C) the marginal utility for alcohol and marijuana is constant.
D) Both B and C.

Accepted Answer

The answer of People view alcohol and marijuana as perfect...

Question 17

Draw the indifference curves for nickels and dimes.Would they ever have a non-constant slope? Explain.

Accepted Answer

The answer of Draw the indifference curves for nickels and...

Question 18

If the utility function (U)between food (F)and clothing (C)can be represented as U =  ,the marginal utility of food equals
A) 
B) 
C) 1/2 
D) 1/2

Accepted Answer

The marginal utility of food can be found by taking the partial derivative of the utility function with respect to food (F), which gives us MU_F = 6. That means the marginal utility of food is a constant and is equal to 6. However, none of the answer choices provide this value. We need to find the answer choice that is closest to 6. 
Option C is the closest to 6, as it is half of the value in option B, which is 12. Therefore, the best choice is option C.

Question 19

Clifford lives by the motto "Eat,drink and be merry today,for tomorrow doesn't matter." If today's consumption is measured on the horizontal axis and tomorrow's consumption is measured on the vertical axis,Clifford's indifference curves
A) are horizontal straight lines.
B) are vertical straight lines.
C) show decreasing utility as one moves upward.
D) cannot be determined from the information given.

Accepted Answer

Clifford's motto implies that he places no value on future consumption, so his indifference curves will be vertical straight lines. This means he is indifferent between consuming a lot today and a little tomorrow, or vice versa.

Question 20

Some people view cosmetic surgery (c)and facials (f)as perfect substitutes as measured by the utility function U(c,f)= 5c + 10f.What is the marginal utility of cosmetic surgery?
A) MU = 5.
B) MU = 10.
C) MU = 15.
D) None of the above.

Accepted Answer

Since individuals view cosmetic surgery and facials as perfect substitutes, the marginal utility of cosmetic surgery must be equal to the marginal utility of facials, which is 10. Therefore, the marginal utility of cosmetic surgery is 5, which is the coefficient of c in the utility function.

Quiz 4: Consumer Choice

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = x,then it can be concluded that

Clifford lives by the motto "Eat drink and be merry today,for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y",then which of the following best represents Clifford's utility function?

If Fred's marginal rate of substitution of salad for pizza equals 5,then

If Fred's marginal utility of pizza equals 10 and his marginal utility of salad equals 2,then

If the utility function (U) between food (F) and clothing (C) can be represented as U = ,the marginal rate of substitution of clothing for food equals

Adrian's total utilities of two consumption bundles are 50 and 100.This implies that

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = y,then it can be concluded that

If the utility function (U) between food (F) and clothing (C) can be represented as U = ,the marginal utility of food

If Johnny likes homework (H) but hates exercise (E) ,which of the following might best represent his utility function for homework and exercise?

Draw the indifference curves for rock concerts and food for each of the following: (a)a typical 17-year-old (b)a typical 75-year-old

If two bundles are on the same indifference curve,then

Utility is the set of numerical values that

If two goods,"x" and "y",are perfect substitutes,then which of the following best represents the utility function for the two goods?

Individuals derive utility from picnics,p,and kayak trips,k.Assuming that an individual's utility is U(p,k) = k^0.5p^0.⁵ and income is $100,what is the marginal rate of substitution (MRS) between picnics and kayak trips?

If the utility for two goods "x" and "y" is measured as U = x + y,then it can be concluded that

People view alcohol and marijuana as perfect substitutes.This means that

Draw the indifference curves for nickels and dimes.Would they ever have a non-constant slope? Explain.

If the utility function (U) between food (F) and clothing (C) can be represented as U = ,the marginal utility of food equals

Clifford lives by the motto "Eat,drink and be merry today,for tomorrow doesn't matter." If today's consumption is measured on the horizontal axis and tomorrow's consumption is measured on the vertical axis,Clifford's indifference curves

Some people view cosmetic surgery (c) and facials (f) as perfect substitutes as measured by the utility function U(c,f) = 5c + 10f.What is the marginal utility of cosmetic surgery?

Quiz 4: Consumer Choice

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = x,then it can be concluded that

Clifford lives by the motto "Eat drink and be merry today,for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y",then which of the following best represents Clifford's utility function?

If Fred's marginal rate of substitution of salad for pizza equals 5,then

If Fred's marginal utility of pizza equals 10 and his marginal utility of salad equals 2,then

If the utility function (U) between food (F) and clothing (C) can be represented as U = ,the marginal rate of substitution of clothing for food equals

Adrian's total utilities of two consumption bundles are 50 and 100.This implies that

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = y,then it can be concluded that

If the utility function (U) between food (F) and clothing (C) can be represented as U = ,the marginal utility of food

If Johnny likes homework (H) but hates exercise (E) ,which of the following might best represent his utility function for homework and exercise?

Draw the indifference curves for rock concerts and food for each of the following: (a)a typical 17-year-old (b)a typical 75-year-old

If two bundles are on the same indifference curve,then

Utility is the set of numerical values that

If two goods,"x" and "y",are perfect substitutes,then which of the following best represents the utility function for the two goods?

Individuals derive utility from picnics,p,and kayak trips,k.Assuming that an individual's utility is U(p,k) = k0.5p0.5 and income is $100,what is the marginal rate of substitution (MRS) between picnics and kayak trips?

If the utility for two goods "x" and "y" is measured as U = x + y,then it can be concluded that

People view alcohol and marijuana as perfect substitutes.This means that

Draw the indifference curves for nickels and dimes.Would they ever have a non-constant slope? Explain.

If the utility function (U) between food (F) and clothing (C) can be represented as U = ,the marginal utility of food equals

Clifford lives by the motto "Eat,drink and be merry today,for tomorrow doesn't matter." If today's consumption is measured on the horizontal axis and tomorrow's consumption is measured on the vertical axis,Clifford's indifference curves

Some people view cosmetic surgery (c) and facials (f) as perfect substitutes as measured by the utility function U(c,f) = 5c + 10f.What is the marginal utility of cosmetic surgery?

Individuals derive utility from picnics,p,and kayak trips,k.Assuming that an individual's utility is U(p,k) = k^0.5p^0.⁵ and income is $100,what is the marginal rate of substitution (MRS) between picnics and kayak trips?