Question 1

The marginal utility gained from the consumption of successive units of a normal good:
A)tends to decrease.
B)tends to increase.
C)may increase or decrease depending on the cost of the good.
D)tends to stay the same.

Accepted Answer

The law of diminishing marginal utility states that as a person consumes more units of a good, the additional satisfaction or utility gained from each additional unit decreases. This means that the marginal utility gained from the consumption of successive units tends to decrease.

Question 2

Linus has just watched two hours of TV.We can say:
A)his second hour of watching TV likely reduced his total utility.
B)his second hour of watching TV likely added less to his total utility than the first.
C)if he watches a third hour it will likely decrease his total utility.
D)if he watches a third hour it will likely increase his total utility by at least as much as the second.

Accepted Answer

According to the law of diminishing marginal utility, the more we consume of a good, the less additional utility we receive from each additional unit consumed. Therefore, it is likely that Linus's second hour of watching TV added less to his total utility than the first.

Question 3

Ben is asked to rate the utility he would get from reading different types of publications for the next hour.If he read a graphic novel he would get utility of 5.If he read a biography,he would get utility of 4,and if he read his economics textbook,he would get utility of 9.An economist would predict that Ben will spend his next hour reading:
A)a graphic novel.
B)a biography.
C)his economics textbook.
D)It is impossible to predict how Ben will spend his time.

Accepted Answer

According to the economist's prediction, Ben will spend his next hour reading his economics textbook as it gives him the highest utility of 9 compared to a graphic novel (5) and a biography (4).

Question 4

Dave and Buster play two games of tennis,then decide to go have lunch.This type of decision making can be explained using the concept of:
A)the income effect.
B)the substitution effect.
C)diminishing marginal utility.
D)income maximization.

Accepted Answer

Diminishing marginal utility explains that as individuals consume more of a good or service, the additional satisfaction or utility they gain from each additional unit decreases, leading them to stop or switch activities, like going for lunch after playing tennis.

Question 5

After watching a movie,Alan chooses not to watch a second and goes for a walk instead.Economists could explain his choices using the concept of:
A)budget constraints.
B)diminishing marginal utility.
C)income effect.
D)substitution effect.

Accepted Answer

The concept of diminishing marginal utility states that as a person consumes more of a good or service, the additional satisfaction or utility they receive from each unit consumed decreases. Therefore, Alan may have decided not to watch a second movie because he reached a point where the additional satisfaction he would receive from watching another movie was lower than the satisfaction he would receive from going for a walk.

Question 6

Howard has just smoked a cigarette.If he chooses to smoke a second one:
A)he will experience a drop in total utility.
B)he is not acting rationally.
C)he will derive less utility from it than his first.
D)None of these is true.

Accepted Answer

According to the law of diminishing marginal utility, as Howard continues to smoke additional cigarettes, the marginal utility he receives from each cigarette will decrease. Therefore, he will derive less utility from the second cigarette than he did from the first.

Question 7

If Bella eats one piece of pie,she gains a utility of 10.If she continues,a second piece yields a marginal utility of 8,a third will bring marginal utility of 2,and a fourth piece of pie will yield a marginal utility of -2.We can say:
A)Bella's total utility from eating four pieces of pie would be 22.
B)Bella's total utility will decrease if she eats the third piece of pie.
C)Bella's total utility will be maximized if she eats three pieces.
D)Bella's total utility decreases after the first piece of pie.

Accepted Answer

According to the law of diminishing marginal utility, as Bella eats more pieces of pie, the marginal utility will decrease. Therefore, Bella's total utility will be maximized when the marginal utility equals zero. From the given information, we can see that the marginal utility of the third piece of pie is 2, which is the last positive marginal utility. Therefore, Bella's total utility will be maximized if she eats three pieces of pie.

Question 8

Nona has just gone on a bike ride for an hour and received a utility of 7.If she chooses to continue to ride her bike for another hour:
A)we can assume she will get at least a utility of 7.
B)we can assume she will get a utility of 7.
C)we can assume she will get less than a utility of 7.
D)we can assume Nona's total utility will fall because of diminishing marginal utility.

Accepted Answer

Due to the principle of diminishing marginal utility, the additional satisfaction (utility) Nona receives from each additional hour of biking is likely to decrease.

Question 9

Katie just finished a bottle of Coke.Using the concept of marginal utility,we can say:
A)the utility she will gain if she drinks another will reduce her total utility.
B)the utility she will gain if she drinks another might reduce her total utility.
C)the utility she will gain if she drinks another will be the same as that of her first.
D)None of these is necessarily true.

Accepted Answer

Marginal utility refers to the additional satisfaction gained from consuming an additional unit of a good. It doesn't necessarily mean that the total utility will decrease or remain the same; it could increase at a decreasing rate.

Question 10

Thinking about the total utility gained from the consumption of a typical good,we can say,in general,for normal goods:
A)total utility will rise,peak,and then decline as more and more units are consumed.
B)consuming more and more units of a good will eventually cause total utility to fall.
C)total utility increases by decreasing amounts,until it is maximized.Then it declines.
D)All of these are true.

Accepted Answer

The answer of Thinking about the total utility gained from...

Question 11

Claire has just eaten her second bowl of cereal.We can say:
A)her second bowl likely reduced her total utility.
B)her second bowl likely added less to her total utility than the first.
C)her third bowl will likely decrease her total utility.
D)her third bowl will likely increase her total utility by at least as much as the second.

Accepted Answer

According to the law of diminishing marginal utility, each additional unit consumed of a good or service will provide less additional utility. Therefore, her second bowl likely added less to her total utility than the first. It is not necessarily true that her third bowl will decrease her total utility, as it depends on how much utility she derives from each additional bowl. It is also not necessarily true that the third bowl will increase her total utility by at least as much as the second, as the law of diminishing marginal utility suggests that the third bowl will likely provide even less additional utility than the second.

Question 12

The concept of diminishing marginal utility:
A)explains why individuals rarely maximize their total utility.
B)is the change in total utility that comes from consuming one additional unit of a good or service.
C)is the principle that the additional utility gained from consuming successive units of a good or service tends to be smaller than the utility gained from the previous unit.
D)is the principle that the additional utility gained from consuming different bundles of goods and services tend to be smaller than the utility gained from consuming just one bundle of goods and services.

Accepted Answer

The concept of diminishing marginal utility is the principle that the additional utility gained from consuming successive units of a good or service tends to be smaller than the utility gained from the previous unit.

Question 13

If Bob has one piece of gum in his mouth,he gains a utility of 12.If he adds a second piece to the first,it yields a marginal utility of 6;adding a third will bring marginal utility of 1.Adding a fourth piece will make Bob choke,yielding a marginal utility of -4.We can say:
A)Bob's total utility from chewing four pieces of gum would be 23.
B)Bob's total utility will decrease if he chews the fourth piece of gum.
C)Bob's total utility will be maximized if he eats two pieces.
D)Bob's total utility decreases after the first piece of gum.

Accepted Answer

The answer of If Bob has one piece of gum...

Question 14

Grace has just eaten a slice of pizza and received a utility of 8.If she chooses to eat a second slice:
A)she will experience a drop in total utility.
B)she is not acting rationally.
C)she will derive less than a utility of 8 from it.
D)None of these is true.

Accepted Answer

According to the law of diminishing marginal utility, the additional satisfaction (utility) from consuming an additional unit of a good (in this case, a second slice of pizza) is typically less than the satisfaction gained from consuming the previous unit.

Question 15

Elijah has just eaten his second popsicle.Using the concept of marginal utility,we can say:
A)the utility he will gain from his third will reduce his total utility.
B)the utility he will gain from his third might reduce his total utility.
C)the utility he will gain from his third will likely be less than that of his second.
D)Both b and c are true.

Accepted Answer

According to the law of diminishing marginal utility, the more an individual consumes a good or service, the less additional satisfaction or utility they will receive from consuming more of it. Therefore, as Elijah eats more popsicles, the utility he gains from each additional popsicle will decrease, which means both options b and c are likely true.

Question 16

The concept of marginal utility:
A)explains why individuals find it difficult to maximize their total utility.
B)is the change in total utility that comes from consuming one additional unit of a good or service.
C)can only be applied to situations in which individuals can choose among several goods or services.
D)All of these are true.

Accepted Answer

Marginal utility is defined as the change in total utility that comes from consuming one additional unit of a good or service. It helps individuals make decisions about how much of a good or service to consume, based on the additional satisfaction they will receive from each additional unit. The concept of marginal utility applies to all situations in which individuals can choose among goods or services, and can be used to help them maximize their total utility.

Question 17

If successive units of a good are consumed,the marginal utility gained typically:
A)increases at the same rate for all people.
B)increases at different rates for different people.
C)decreases at the same rate for all people.
D)decreases at different rates for different people.

Accepted Answer

The law of diminishing marginal utility states that as consumption of a good increases, the marginal utility gained from each additional unit consumed decreases. However, this rate of decrease may vary for different individuals based on their preferences and needs. Hence, the marginal utility gained typically decreases at different rates for different people.

Question 18

Alison is deciding how to spend the next hour.We ask her to rate the utility she would get from an hour of each activity.She would get utility of 4 from an hour of reading,utility of 2 from an hour of playing video games,and utility of 6 from shopping.Based on this information,economists could predict that Alison will:
A)read.
B)play video games.
C)go shopping.
D)do nothing,since none of the activities give her utility greater than 10.

Accepted Answer

Alison would get the highest utility of 6 from shopping, so it is likely that she will choose to go shopping over reading or playing video games.

Question 19

Johnny spends his day doing a variety of activities;he spends the morning exercising and doing yard work,reads in the afternoon,and hosts a dinner party in the evening.Economists would best explain his choice to do a variety of activities instead of a single activity using the concept of:
A)tastes and preferences
B)budget constraints
C)diminishing marginal utility
D)income effect

Accepted Answer

The concept of diminishing marginal utility explains why Johnny chooses to do a variety of activities instead of a single activity. Diminishing marginal utility refers to the idea that as a person consumes more of a good or service, the additional satisfaction or utility they receive from each additional unit diminishes. By doing a variety of activities, Johnny is able to experience different kinds of satisfaction and avoid the diminishing marginal utility that would occur if he engaged in only one activity all day.

Question 20

Sadie has just eaten a donut and received a utility of 6.If she chooses to eat another donut:
A)we can assume she will get at least a utility of 6.
B)we can assume she will get a utility of 6.
C)we can assume she will get less than a utility of 6.
D)we can assume Sadie's total utility will fall because of diminishing marginal utility.

Accepted Answer

Due to the principle of diminishing marginal utility, the additional satisfaction (utility) Sadie receives from consuming an additional donut is likely to be less than the utility she received from the first donut.

Quiz 7: Consumer Behavior

The marginal utility gained from the consumption of successive units of a normal good:

Linus has just watched two hours of TV.We can say:

Dave and Buster play two games of tennis,then decide to go have lunch.This type of decision making can be explained using the concept of:

After watching a movie,Alan chooses not to watch a second and goes for a walk instead.Economists could explain his choices using the concept of:

Howard has just smoked a cigarette.If he chooses to smoke a second one:

If Bella eats one piece of pie,she gains a utility of 10.If she continues,a second piece yields a marginal utility of 8,a third will bring marginal utility of 2,and a fourth piece of pie will yield a marginal utility of -2.We can say:

Nona has just gone on a bike ride for an hour and received a utility of 7.If she chooses to continue to ride her bike for another hour:

Katie just finished a bottle of Coke.Using the concept of marginal utility,we can say:

Thinking about the total utility gained from the consumption of a typical good,we can say,in general,for normal goods:

Claire has just eaten her second bowl of cereal.We can say:

The concept of diminishing marginal utility:

If Bob has one piece of gum in his mouth,he gains a utility of 12.If he adds a second piece to the first,it yields a marginal utility of 6;adding a third will bring marginal utility of 1.Adding a fourth piece will make Bob choke,yielding a marginal utility of -4.We can say:

Grace has just eaten a slice of pizza and received a utility of 8.If she chooses to eat a second slice:

Elijah has just eaten his second popsicle.Using the concept of marginal utility,we can say:

The concept of marginal utility:

If successive units of a good are consumed,the marginal utility gained typically:

Johnny spends his day doing a variety of activities;he spends the morning exercising and doing yard work,reads in the afternoon,and hosts a dinner party in the evening.Economists would best explain his choice to do a variety of activities instead of a single activity using the concept of:

Sadie has just eaten a donut and received a utility of 6.If she chooses to eat another donut: