Question 1

Corey has a blue sweater and a denim jacket. On some days he chooses to wear the sweater but on others he chooses to wear the jacket. Economists would most likely conclude that:

Accepted Answer

A)  Corey's preferences have changed.
B)  Corey's preferences have not changed, but other factors, such as the temperature outside, may have changed.
C)  Corey is not acting rationally but rather considering the emotional impact of his choice.
D)  Corey's preferences for wearing a jacket versus wearing a sweater are not defined.E) All of the above
F) A) and B) B

Question 2

The table shown describes all the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items.

The bundle of goods that will give Jack the highest total utility is:

Accepted Answer

A)  bundle E.
B)  bundle B.
C)  bundle C.
D)  bundle D.E) B) and C)
F) A) and D)

Question 3

Kimberly decides to decrease her hours at work to focus on school. Now that she has less income, she finds herself eating less steak and more pasta than ever before. What can we conclude about these goods?

Accepted Answer

A)  Steak and pasta are both normal goods, because she will eat both regardless of her income.
B)  Steak and pasta are both inferior goods, because she will eat both regardless of her income.
C)  Pasta is an inferior good, because her demand for pasta increased when her income went down.
D)  Steak is an inferior good, because her demand for steak decreased when her income went down.E) B) and C)
F) A) and D)

Question 4

Which of the following statements is true about individuals and utility?

Accepted Answer

A)  Individuals seek to maximize utility.
B)  Individuals seek to minimize utility.
C)  Individuals will either minimize or maximize utility depending on the situation.
D)  Individuals focus more on maximizing income than utility.E) None of the above
F) All of the above

Question 5

Marginal utility:

Accepted Answer

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)  is the loss in utility an individual experiences after making a bad decision.E) B) and D)
F) B) and C)

Question 6

of gloves is negative.II. The marginal utility of gloves increases first and then decreases.III. The marginal utility of the 6th pair of gloves is smaller than the marginal utility of the 1st pair of gloves. A) I and III B) II and III C) I and II D) I, II, and III" class="answers-bank-image d-inline" rel="preload" > Assume the graph shown displays Nadia's total utility function for pairs of gloves. Which of the following statements is true?I. The marginal utility of the 10th of gloves is negative.II. The marginal utility of gloves increases first and then decreases.III. The marginal utility of the 6th pair of gloves is smaller than the marginal utility of the 1st pair of gloves.

Accepted Answer

A)  I and III
B)  II and III
C)  I and II
D)  I, II, and IIIE) A) and C)
F) A) and B)

Question 7

Assume Jordan's budget constraint is represented in the graph shown. If Jordan's income is $18, what are the prices of these two goods?

Accepted Answer

A)  A protein bar costs $3 and a bagel costs $2.
B)  A protein bar costs $4 and a bagel costs $3.
C)  A protein bar costs $12 and a bagel costs $9.
D)  A protein bar costs $6 and a bagel costs $3.E) All of the above
F) None of the above

Question 8

Assume the graph shown represents Isaac's budget constraint. Isaac has $60 to spend on movie rentals and movie theater tickets. Which of the following can be said about Isaac's choices?

Accepted Answer

A)  Isaac can buy three times as many movie rentals as movie theater tickets.
B)  Movies theater tickets must cost $15 each.
C)  Movie rentals must cost $5 each.
D)  All of these are correct.E) None of the above
F) A) and B)

Question 9

The table shown describes the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items.

Considering the information in the table, what is the price of an ice cream cone?

Accepted Answer

A)  $2
B)  $1
C)  $4
D)  $5E) None of the above
F) C) and D)

Question 10

Johnny spends his Saturday doing a variety of activities. In the morning he exercises and does yard work. He 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

A)  tastes and preferences.
B)  budget constraints.
C)  diminishing marginal utility.
D)  income effect.E) B) and C)
F) None of the above C

Question 11

Economists assume that an individual chooses the option that:

Accepted Answer

A)  gives the individual the least utility.
B)  gives the individual the most utility.
C)  creates the most utility for society.
D)  is the most efficient choice.E) A) and C)
F) B) and C)

Question 12

If Xavier's budget constraint is represented in the graph shown, and the price of a bag of chips is $3, what is Xavier's income?

Accepted Answer

A)  $9
B)  $27
C)  $12
D)  Cannot answer this without knowing the price of soda.E) A) and B)
F) A) and C)

Question 13

Max is shopping for a new winter jacket. He is deciding between two coats that have identical features but are made by different brands: Columbia and Michael Kors. The Columbia jacket costs $120 and the Michael Kors jacket costs $300. Max decides to buy the Michael Kors jacket. This indicates that the Michael Kors jacket may be a(n) _____ good.

Accepted Answer

A)  normal
B)  inferior
C)  Veblen
D)  GiffenE) A) and B)
F) A) and D)

Question 14

Assume Kara's budget constraint is represented by line A in the graph shown, and that her income to spend on these two items is $24. Her budget constraint will move to line B if the price of movie tickets:

Accepted Answer

A)  decreases to $4.
B)  increases to $4.
C)  decreases to $6.
D)  increases to $6.E) A) and B)
F) C) and D) B

Question 15

Sam has $200 a month to spend on either tanning sessions or rounds of golf. Tanning sessions are $20 each and a round of golf is $40. What can we say about Sam's utility?

Accepted Answer

A)  Sam will receive more utility from each round of golf than each tanning session.
B)  Sam will receive the same utility from one round of golf as he would from two tanning sessions.
C)  Sam will maximize the utility he receives from 2 rounds of golf and 6 tanning sessions.
D)  This question cannot be answered without more information.E) A) and B)
F) B) and D)

Question 16

Billy is deciding whether to stay home and watch TV or go out with friends. If Billy decides to stay home, we can conclude that he:

Accepted Answer

A)  is a homebody who rarely goes out.
B)  will receive more utility from watching TV than going out with friends.
C)  wants to stay home this time, but will likely choose to go out with friends the next time.
D)  has revealed a preference to always be alone.E) C) and D)
F) None of the above

Question 17

The table shown describes the different combinations of goods that Jack can consume, given that his income to spend on these two items is $10.

If Jack's income increases to $16, he could afford to buy:

Accepted Answer

A)  16 popsicles and 8 ice cream cones.
B)  either 16 popsicles or 8 ice cream cones.
C)  8 ice cream cones and 4 popsicles.
D)  none of these options.E) A) and B)
F) A) and D)

Question 18

What is a baseline assumption that economists make about consumer behavior?

Accepted Answer

A)  People are rational utility maximizers.
B)  People will always choose short-term benefits to longer-term payoffs.
C)  People will always choose what makes them happiest.
D)  People are unpredictable.E) B) and D)
F) A) and B)

Question 19

When someone is served pizza and soda for dinner, that individual would typically eat some pizza, then drink some soda, then eat more pizza, and so on, until consumption of both pizza and soda ceases. How can this behavior be explained using economic concepts?

Accepted Answer

A)  The individual is revealing an indecisiveness about whether more utility is received from pizza or from soda.
B)  People tend to act irrationally around food, and the concept of utility maximization cannot be applied.
C)  The individual continues to eat each good until the marginal utility for the one good is lower than the other.
D)  The concept of unlimited wants states that an individual will never tire of eating pizza and soda.E) A) and B)
F) None of the above

Question 20

Riding her bike for one hour has given Aditi a utility of 7. If Aditi chooses to ride her bike for another hour, we can assume that:

Accepted Answer

A)  she will receive a marginal utility of more than 7.
B)  she will receive a marginal utility of 7.
C)  she will receive a marginal utility of less than 7.
D)  her total utility will fall because of diminishing utility.E) All of the above
F) B) and C)

Exam 7: Consumer Behavior

Corey has a blue sweater and a denim jacket. On some days he chooses to wear the sweater but on others he chooses to wear the jacket. Economists would most likely conclude that:

Correct Answer
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B

The table shown describes all the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items. The bundle of goods that will give Jack the highest total utility is:

Correct Answer
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Kimberly decides to decrease her hours at work to focus on school. Now that she has less income, she finds herself eating less steak and more pasta than ever before. What can we conclude about these goods?

Correct Answer
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Which of the following statements is true about individuals and utility?

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Marginal utility:

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Assume Jordan's budget constraint is represented in the graph shown. If Jordan's income is $18, what are the prices of these two goods?

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Assume the graph shown represents Isaac's budget constraint. Isaac has $60 to spend on movie rentals and movie theater tickets. Which of the following can be said about Isaac's choices?

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The table shown describes the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items. Considering the information in the table, what is the price of an ice cream cone?

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C

Economists assume that an individual chooses the option that:

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If Xavier's budget constraint is represented in the graph shown, and the price of a bag of chips is $3, what is Xavier's income?

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Assume Kara's budget constraint is represented by line A in the graph shown, and that her income to spend on these two items is $24. Her budget constraint will move to line B if the price of movie tickets:

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B

Sam has $200 a month to spend on either tanning sessions or rounds of golf. Tanning sessions are $20 each and a round of golf is $40. What can we say about Sam's utility?

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Billy is deciding whether to stay home and watch TV or go out with friends. If Billy decides to stay home, we can conclude that he:

Correct Answer
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The table shown describes the different combinations of goods that Jack can consume, given that his income to spend on these two items is $10. If Jack's income increases to $16, he could afford to buy:

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What is a baseline assumption that economists make about consumer behavior?

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When someone is served pizza and soda for dinner, that individual would typically eat some pizza, then drink some soda, then eat more pizza, and so on, until consumption of both pizza and soda ceases. How can this behavior be explained using economic concepts?

Correct Answer
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Riding her bike for one hour has given Aditi a utility of 7. If Aditi chooses to ride her bike for another hour, we can assume that:

Correct Answer
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Exam 7: Consumer Behavior

Corey has a blue sweater and a denim jacket. On some days he chooses to wear the sweater but on others he chooses to wear the jacket. Economists would most likely conclude that:

Correct AnswerverifiedB

The table shown describes all the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items. The bundle of goods that will give Jack the highest total utility is:

Correct AnswerverifiedShow Answer

Kimberly decides to decrease her hours at work to focus on school. Now that she has less income, she finds herself eating less steak and more pasta than ever before. What can we conclude about these goods?

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Which of the following statements is true about individuals and utility?

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Marginal utility:

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Assume Jordan's budget constraint is represented in the graph shown. If Jordan's income is $18, what are the prices of these two goods?

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Assume the graph shown represents Isaac's budget constraint. Isaac has $60 to spend on movie rentals and movie theater tickets. Which of the following can be said about Isaac's choices?

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The table shown describes the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items. Considering the information in the table, what is the price of an ice cream cone?

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Economists assume that an individual chooses the option that:

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If Xavier's budget constraint is represented in the graph shown, and the price of a bag of chips is $3, what is Xavier's income?

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Assume Kara's budget constraint is represented by line A in the graph shown, and that her income to spend on these two items is $24. Her budget constraint will move to line B if the price of movie tickets:

Correct AnswerverifiedB

Sam has $200 a month to spend on either tanning sessions or rounds of golf. Tanning sessions are $20 each and a round of golf is $40. What can we say about Sam's utility?

Correct AnswerverifiedShow Answer

Billy is deciding whether to stay home and watch TV or go out with friends. If Billy decides to stay home, we can conclude that he:

Correct AnswerverifiedShow Answer

The table shown describes the different combinations of goods that Jack can consume, given that his income to spend on these two items is $10. If Jack's income increases to $16, he could afford to buy:

Correct AnswerverifiedShow Answer

What is a baseline assumption that economists make about consumer behavior?

Correct AnswerverifiedShow Answer

When someone is served pizza and soda for dinner, that individual would typically eat some pizza, then drink some soda, then eat more pizza, and so on, until consumption of both pizza and soda ceases. How can this behavior be explained using economic concepts?

Correct AnswerverifiedShow Answer

Riding her bike for one hour has given Aditi a utility of 7. If Aditi chooses to ride her bike for another hour, we can assume that:

Correct AnswerverifiedShow Answer

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B

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C

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B

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