Question 1

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

Accepted Answer

According to the law of diminishing marginal utility, the additional utility gained from consuming each unit of a good or service decreases as more of it is consumed. Therefore, it is likely that the second hour of watching TV added less to his total utility than the first hour. Option A and C are not necessarily true as it depends on his preferences and the quality of the TV content. Option D may not be true as the law of diminishing marginal utility suggests that the additional utility gained from each subsequent hour may decrease even further.

Question 2

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:

Accepted Answer

The concept of diminishing marginal utility states that as we consume more of a good or service, the satisfaction we derive from each additional unit decreases. In this case, Alan may have reached a point where he no longer found watching another movie to be as enjoyable as going for a walk. Therefore, he chose to forgo the second movie in favor of a different activity.

Question 3

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 jogging.Based on this information,economists could predict that Alison will:

Accepted Answer

Alison would get the highest utility from jogging, with a rating of 6. This is higher than the ratings for reading (4) and playing video games (2). Therefore, economists could predict that Alison will choose to go jogging.

Question 4

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

Accepted Answer

This is the principle of diminishing marginal utility, which states that as more and more units of a good are consumed, the additional satisfaction (or marginal utility) from each unit decreases, leading to a peak in total utility and eventually a decline.

Question 5

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

Accepted Answer

According to the Law of Diminishing Marginal Utility, as a person consumes more and more of a good, the marginal utility they obtain from each additional unit will decrease. Therefore, the utility Elijah gains from his third popsicle is likely to be less than that of his second. Additionally, if he continues to consume more popsicles, there is a possibility that the marginal utility may become negative, reducing his total utility.

Question 6

Grace has just eaten a slice of pizza and says it gave her a utility of 8.If she chooses to eat a second slice:

Accepted Answer

Based on the Law of Diminishing Marginal Utility, Grace may experience a decrease in marginal utility from the second slice of pizza, but her total utility will still increase as long as the marginal utility of the second slice is positive. Therefore, it would be rational for her to choose to eat a second slice if her desire for pizza outweighs the potential decrease in marginal utility.

Question 7

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

Accepted Answer

According to the law of diminishing marginal utility, the additional utility gained from consuming additional units of a good or service decreases as the quantity consumed increases. Therefore, we can assume that Nona's marginal utility for the second hour of bike riding will be less than 7, since she has already satisfied some of her desire for bike riding during the first hour. It is unlikely that her marginal utility for the second hour will be exactly 7, as she has already experienced some satisfaction from the first hour.

Question 8

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

Accepted Answer

The law of diminishing marginal utility states that as more units of a good are consumed, the additional utility gained from each additional unit decreases. However, this rate of decrease varies among individuals and is based on factors such as their preferences, needs, and tastes. Therefore, the marginal utility gained decreases at different rates for different people.

Question 9

Sadie has just eaten a donut and says it gave her a utility of 6.If she chooses to eat another donut:

Accepted Answer

According to the principle of diminishing marginal utility, each additional unit consumed provides less additional utility than the previous unit. Therefore, we can assume that Sadie will experience an increase in utility from the second donut, but it will be less than 6 because the first donut already provided some utility.

Question 10

The concept of diminishing marginal utility:

Accepted Answer

Diminishing marginal utility refers to the fact that the additional satisfaction or utility obtained from consuming successive units of a good or service tends to be smaller than the satisfaction gained from the previous unit. This is because as consumers consume more of a good or service, they eventually reach a point where the additional unit provides less and less additional value or satisfaction.

Question 11

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

Accepted Answer

This is the law of diminishing marginal utility. As you consume more of a good, the additional satisfaction or utility you get from each additional unit consumed will eventually decline.

Question 12

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

Accepted Answer

This is because of the law of diminishing marginal utility, which states that as a person consumes more of a good, the additional satisfaction or utility derived from each additional unit of the good decreases. Therefore, Howard will derive less marginal utility from smoking a second cigarette than he did from his first, indicating that it may not be the most rational choice.

Question 13

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

Accepted Answer

The answer of Katie just finished a bottle of Coke.Using...

Question 14

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 say his choice to do a variety of activities instead of spending all of his time on one activity illustrates the concept of:

Accepted Answer

The concept being illustrated here is diminishing marginal utility, which states that as one consumes more and more of a good or service, the added satisfaction or benefit received from each additional unit of that good or service decreases. By doing a variety of activities, Johnny is spreading out his consumption of different goods (in this case, leisure activities) and thus avoiding the diminishing marginal utility that would result from consuming too much of any one activity.

Question 15

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:

Accepted Answer

Based on the principle of diminishing marginal utility, an individual will tend to choose an activity that provides the highest utility per unit of time. In this case, the economics textbook provides the highest utility at 9, compared to the graphic novel at 5 and the biography at 4. Therefore, an economist would predict that Ben will spend his next hour reading his economics textbook.

Question 16

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

Accepted Answer

The law of diminishing marginal utility states that as a person consumes more and more of a good or service, the additional satisfaction or utility that they derive from each additional unit will eventually decrease. Therefore, it's likely that Claire's second bowl of cereal added less to her total utility than the first. As for the third bowl, we don't have enough information to determine whether it will increase or decrease her total utility.

Question 17

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 yield a marginal utility of 2,and a fourth piece of pie will yield a marginal utility of 2.We can say:

Accepted Answer

According to the law of diminishing marginal utility, as Bella consumes more and more pie, her marginal utility will decrease. In this case, we see that her marginal utility decreases from 10 to 8 to 2 to 2. Therefore, she should stop consuming pie when her marginal utility is equal to or lower than the price of the pie. Assuming the price of the pie is constant, her marginal utility falls below the price at the third piece of pie. Therefore, Bella's total utility will be maximized if she eats three pieces of pie.

Question 18

Jeff and Roel like to eat pizza twice a week,burritos once a week,and steak four days a week.This variety of dinner choices illustrates the concept of:

Accepted Answer

The variety of dinner choices illustrates the concept of diminishing marginal utility, which means that the more of a particular good or service a person consumes, the lower the additional satisfaction that person derives from each extra unit. Therefore, Jeff and Roel may find that they enjoy their first pizza more than their second pizza in the same week, as the marginal utility of pizza decreases with each additional slice. To maximize their overall satisfaction, they should balance their consumption of pizza, burritos, and steak to avoid diminishing marginal utility.

Question 19

The concept of marginal utility:

Accepted Answer

Marginal utility is the additional utility gained from consuming one additional unit of a good or service. It is the change in total utility resulting from that additional unit. Option A is not correct because marginal utility helps individuals make decisions that can maximize their total utility. Option C is not completely accurate as marginal utility can also be applied to situations where an individual is consuming only one good or service. Option D is not correct as marginal utility does not account for bad decisions, but rather the additional satisfaction gained from consuming an additional unit.

Question 20

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:

Accepted Answer

Adding the fourth piece results in a negative marginal utility of -4, which decreases the total utility.

Quiz 7: Consumer Behavior