Question 1

Answer the question based on the table below showing the marginal utility schedules for product X and product Y for a hypothetical consumer. The price of product X is $4, and the price of product Y is $2. The income of the consumer is $30.  If the consumer buys both product X and product Y, how much will the consumer buy of each in order to maximize utility?

Accepted Answer

A)  3X and 3Y
B)  4X and 4Y
C)  5X and 4Y
D)  5X and 5YE) A) and B)
F) C) and D)

Question 2

c represent the price of beer, which demand curve (d) above is consistent with graph I? A) graph A B) graph B C) graph C D) graph D " class="answers-bank-image d-inline" rel="preload" > Graph I above shows E.T.'s equilibrium combinations of beer and candy for three different prices of beer. (I₁, I₂, and I₃ are indifference curves. The price of a package of candy is constant at $1.00.) Letting Pc represent the price of beer, which demand curve (d) above is consistent with graph I?

Accepted Answer

A)  graph A
B)  graph B
C)  graph C
D)  graph DE) C) and D)
F) B) and C)

Question 3

Mary says, "You would have to pay me $50 to attend that pro wrestling event." For Mary, the marginal utility of the event is

Accepted Answer

A)  zero.
B)  positive, but declines rapidly.
C)  negative.
D)  positive, but less than the ticket price.E) C) and D)
F) None of the above

Question 4

What are two related effects that combine to make a consumer able and willing to buy more of a specific product at a lower price than at a higher price? Explain.

Accepted Answer

The two effects are the income effect an...

Question 5

Assume you are spending your full budget and purchasing such amounts of X and Y that the marginal utility from the last units consumed is 40 and 20 utils, respectively. Assume (a) the prices of X and Y are $8 and $4 respectively; (b) it takes 3 hours to consume a unit of X and 1 hour to consume a unit of Y; and (c) your time is worth $2 per hour. You

Accepted Answer

A)  should substitute X for Y until the marginal utility per hour is the same for both products.
B)  are consuming X and Y in the optimal amounts.
C)  should consume less of Y and more of X.
D)  should consume less of X and more of Y.E) A) and D)
F) A) and C)

Question 6

In 2015, the federal government started requiring restaurants to print calorie counts next to menu items. The intent was to persuade consumers to

Accepted Answer

A)  control and reduce their total calorie intake.
B)  minimize total utility out of their spending.
C)  maximize the calories per dollar spent.
D)  compare marginal utility against calorie counts.E) None of the above
F) A) and B)

Question 7

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the consumer's income is $18.  Which of the following represents the demand schedule for X?

Accepted Answer

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

Question 8

Other things equal, an increase in the price of product A will

Accepted Answer

A)  increase the marginal utility per dollar spent on A.
B)  decrease the marginal utility per dollar spent on A.
C)  not affect the marginal utility per dollar spent on A.
D)  cause utility-maximizing consumers to buy more of A.E) A) and B)
F) B) and C)

Question 9

When the price of a product falls for a good, the

Accepted Answer

A)  income and substitution effects will encourage consumers to purchase more of the product.
B)  income and substitution effects will encourage consumers to purchase less of the product.
C)  substitution effect will encourage consumers to purchase less of the product, and the income effect will encourage them to purchase more.
D)  substitution effect will encourage consumers to purchase more of the product, and the income effect will encourage them to purchase less.E) A) and B)
F) A) and C)

Question 10

When the federal government started requiring restaurants to print calorie counts next to menu items, some people increased their consumption of higher-calorie items. Which of the following best explains this phenomenon?

Accepted Answer

A)  Consumers at restaurants are systematically irrational.
B)  Consumers are more interested in maximizing calories per dollar than health per dollar.
C)  Restaurants lowered the prices of healthier items, signaling to consumers that they are less appealing.
D)  Restaurants cut portion sizes on all items to reduce calorie counts.E) None of the above
F) B) and C)

Question 11

Refer to the diagram. The total utility yielded by 4 units of X is

Accepted Answer

A)  4.
B)  15.
C)  17.
D)  18.E) A) and D)
F) A) and C)

Question 12

A decrease in the prices of two products that a consumer buys out of a constant budget would cause the consumer's

Accepted Answer

A)  indifference curves to shift outward from the origin.
B)  indifference curves to shift inward to the origin.
C)  budget line to shift outward from the origin.
D)  budget line to shift inward to the origin.E) B) and C)
F) None of the above

Question 13

A topographical map shows successively higher equal-elevation lines, whereas an indifference map shows successively higher levels of total

Accepted Answer

A)  utility.
B)  revenue.
C)  profit.
D)  cost.E) A) and B)
F) A) and D)

Question 14

Which of the graphs shows a change in the price of X, but no changes in the price of Y and in the buyer's budget?

Accepted Answer

A)  graph A
B)  graph B
C)  graph C
D)  graph DE) A) and C)
F) A) and B)

Question 15

In 2015 the federal government began requiring restaurants to print the number of calories for each menu item. Discuss the desired outcome and the actual outcome that occurred.

Accepted Answer

The regulation was intended to help cons...

Question 16

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the consumer's income is $18.  What quantities of X and Y should be purchased to maximize utility?

Accepted Answer

A)  2 of X and 1 of Y
B)  4 of X and 5 of Y
C)  2 of X and 5 of Y
D)  2 of X and 6 of YE) C) and D)
F) A) and D)

Question 17

The budget line shows

Accepted Answer

A)  the amount of product A that a consumer is willing to give up to obtain one more unit of product B.
B)  all possible combinations of two goods that can be purchased, given money income and the prices of the goods.
C)  all equilibrium points on an indifference map.
D)  all possible combinations of two goods that yield the same level of utility to the consumer.E) A) and B)
F) A) and C)

Question 18

Refer to the budget line shown in the diagram. Given the same money income, reductions in the prices of both products C and D will

Accepted Answer

A)  shift the budget line outward on the horizontal axis but leave it anchored at "10" on the vertical axis.
B)  shift the budget line to the left.
C)  shift the budget line to the right.
D)  have no effect on the budget line.E) A) and D)
F) B) and C)

Question 19

A consumer's demand curve for a product is downsloping because

Accepted Answer

A)  total utility falls below marginal utility as more of a product is consumed.
B)  marginal utility diminishes as more of a product is consumed.
C)  time becomes less valuable as more of a product is consumed.
D)  the income and substitution effects precisely offset each other.E) A) and B)
F) All of the above

Question 20

Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products J and K.  What level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $52 and the prices of J and K are $8 and $4, respectively?

Accepted Answer

A)  156 utils
B)  124 utils
C)  276 utils
D)  36 utilsE) A) and D)
F) B) and C)

Exam 7: Utility Maximization

Refer to the budget line shown in the diagram. Given the same money income, reductions in the prices of both products C and D will

Correct Answer
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Correct Answer
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When the price of a product falls for a good, the

Correct Answer
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The budget line shows

Correct Answer
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A decrease in the prices of two products that a consumer buys out of a constant budget would cause the consumer's

Correct Answer
verified

Correct Answer
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Which of the graphs shows a change in the price of X, but no changes in the price of Y and in the buyer's budget?

Correct Answer
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Mary says, "You would have to pay me $50 to attend that pro wrestling event." For Mary, the marginal utility of the event is

Correct Answer
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A topographical map shows successively higher equal-elevation lines, whereas an indifference map shows successively higher levels of total

Correct Answer
verified

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the consumer's income is $18. Which of the following represents the demand schedule for X?

Correct Answer
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Other things equal, an increase in the price of product A will

Correct Answer
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Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the consumer's income is $18. What quantities of X and Y should be purchased to maximize utility?

Correct Answer
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Refer to the diagram. The total utility yielded by 4 units of X is

Correct Answer
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When the federal government started requiring restaurants to print calorie counts next to menu items, some people increased their consumption of higher-calorie items. Which of the following best explains this phenomenon?

Correct Answer
verified

Correct Answer
verified

A consumer's demand curve for a product is downsloping because

Correct Answer
verified

In 2015 the federal government began requiring restaurants to print the number of calories for each menu item. Discuss the desired outcome and the actual outcome that occurred.

Correct Answer
verified
The regulation was intended to help cons...
View Answer

What are two related effects that combine to make a consumer able and willing to buy more of a specific product at a lower price than at a higher price? Explain.

Correct Answer
verified
The two effects are the income effect an...
View Answer

In 2015, the federal government started requiring restaurants to print calorie counts next to menu items. The intent was to persuade consumers to

Correct Answer
verified

Correct Answer
verified

Exam 7: Utility Maximization

Refer to the budget line shown in the diagram. Given the same money income, reductions in the prices of both products C and D will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the price of a product falls for a good, the

Correct AnswerverifiedShow Answer

The budget line shows

Correct AnswerverifiedShow Answer

A decrease in the prices of two products that a consumer buys out of a constant budget would cause the consumer's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the graphs shows a change in the price of X, but no changes in the price of Y and in the buyer's budget?

Correct AnswerverifiedShow Answer

Mary says, "You would have to pay me $50 to attend that pro wrestling event." For Mary, the marginal utility of the event is

Correct AnswerverifiedShow Answer

A topographical map shows successively higher equal-elevation lines, whereas an indifference map shows successively higher levels of total

Correct AnswerverifiedShow Answer

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the consumer's income is $18. Which of the following represents the demand schedule for X?

Correct AnswerverifiedShow Answer

Other things equal, an increase in the price of product A will

Correct AnswerverifiedShow Answer

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2, respectively, and that the consumer's income is $18. What quantities of X and Y should be purchased to maximize utility?

Correct AnswerverifiedShow Answer

Refer to the diagram. The total utility yielded by 4 units of X is

Correct AnswerverifiedShow Answer

When the federal government started requiring restaurants to print calorie counts next to menu items, some people increased their consumption of higher-calorie items. Which of the following best explains this phenomenon?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A consumer's demand curve for a product is downsloping because

Correct AnswerverifiedShow Answer

In 2015 the federal government began requiring restaurants to print the number of calories for each menu item. Discuss the desired outcome and the actual outcome that occurred.

Correct AnswerverifiedThe regulation was intended to help cons...View AnswerShow Answer

What are two related effects that combine to make a consumer able and willing to buy more of a specific product at a lower price than at a higher price? Explain.

Correct AnswerverifiedThe two effects are the income effect an...View AnswerShow Answer

In 2015, the federal government started requiring restaurants to print calorie counts next to menu items. The intent was to persuade consumers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
The regulation was intended to help cons...
View Answer

Correct Answer
verified
The two effects are the income effect an...
View Answer

Correct Answer
verified

Correct Answer
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