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Exam 7: Demand: Consumer Choice

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Question 51

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -If a consumer purchases only two goods, X and Y, and if (MU_x / P_x) = (MU_y / P_y), then the consumer cannot reallocate her expenditures on X and Y to increase her utility unless she has more money to spend.

A) True
B) False

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Question 52

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Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -When economists describe the theory of consumer choice, they

A) portray people as simple and methodical with perfectly predictable patterns of behavior.
B) assert that consumer's decisions are based on which goods and services give them the greatest utility within their limited incomes.
C) point out that consumers rarely consider utility in their purchase decisions; they look at other factors like convenience, peer behavior, and price.
D) assert that the retail price is the only variable consumers really consider in making their purchasing decisions.
E) admit that consumer behavior is random and there is no credible economic theory to explain the phenomenon.

F) A) and B)
G) A) and C)

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Question 53

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The table below shows the total utility associated with various units of goods X and Y.Table 7.5 -Refer to Table 7.5. Given that the price of good X is $2 per unit, the price of good Y is $5 per unit, and that the consumer spends a total of $14 on both goods, what is the total utility associated with the utility-maximizing combination?

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -According to neuroeconomists, the limbic portion of the brain called the amygdala is more primitive and deals with emotion.

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -According to neuroeconomists, our logical brain knows we should spend as much as possible when we have money.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -Utility is most closely defined as _____.

The table given below reports the total utility derived by an individual from the consumption of different units of goods A, B, and C.Table 7.4 -Refer to Table 7.4. What is the highest possible total utility a consumer can attain given an income of $10?

The table below shows the total utility associated with various units of goods X and Y.Table 7.5 -As one moves downward on an indifference curve, the:

The below indifference map shows the various combinations of hours of music and apples that yield different levels of utility.Figure 7.1 -Suppose a budget line is drawn with X on the horizontal axis and Y on the vertical axis. A decrease in the price of X will cause:

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -Suppose the prices of goods X, Y, and Z are $4, $1, and $5, respectively, and the last unit purchased of good X has a marginal utility MU_x = 16 utils. At the point of equilibrium, the marginal utility of the last unit purchased of goods Y and Z will be:

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -To decide which of the two goods is a better buy, a consumer should compare the products' _____.

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -If a consumer is buying only two goods, A and B, then he or she will be in equilibrium only when MU_a = MU_b.

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -In order to maximize utility, consumers _____.

The table given below depicts the total utility derived from the consumption of a good.Table 7.1 -According to Table 7.1, marginal utility _____.

Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10. -If a consumer purchases more of a product, then most likely the marginal utility of _____.

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -As long as the marginal utilities per dollar obtained from the last unit of all products consumed are the same, _____.

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Marginal utility is total utility divided by the number of units consumed.

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -If a dinner guest was serious when she said that she could never get enough of your cooking, you would conclude that the marginal utility of your cooking for her was _____.

The table given below records the total utility derived from the consumption of avocados.Table 7.2 -According to Table 7.2, marginal utility is positive _____.

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -Refer to Table 7.3. Marginal utility diminishes for good A from the _____ unit.