# Combo With "Econ160: Ch.7 Utility Maximization" And 1 Other

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question
An indifference curve shows all:
combinations of two products yielding the same total utility to a consumer.
question Refer to the diagram where xy is the relevant budget line and I1, I2, and I3 are indifference curves. If the consumer is initially at point L, he or she should:
purchase more of Y and less of X.
question
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. Refer to the data. 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?
276 utils
question
Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 5 and MUb/Pb = 8. Ben should purchase:
more of B and less of A
question
In drawing a particular budget line, money income and the prices of the two products are fixed.
True
question
A consumer is maximizing her utility with a particular money income when:
MUa/Pa = MUb/Pb = MUc/Pc = . . . = MUn/Pn.
question
Frank is purchasing products C and D in utility-maximizing amounts. If the price of C is \$4 and the price of D is \$2, then:
the marginal utility of C is twice that of D.
question
If marginal utility is diminishing, total utility must also be declining.
False
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If the price of A is \$12 and the price of B is \$3, the budget line tells us that a consumer in effect can trade:
1 unit of A for 4 of B.
question Refer to the diagram. Total utility is at a maximum at _____ units of X.
6
question
(Last Word) Theft and burglary:
can be viewed as attempts to maximize utility, given certain marginal costs and marginal benefits.
question
A product has utility if it:
satisfies consumer wants.
question 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:
shift the budget line to the right.
question
At each point on an indifference curve:
total utility is the same.
question
"Essential" water is cheaper than "nonessential" diamonds because:
the supply of water is great relative to demand and the supply of diamonds is small relative to demand.
question Refer to the diagram where xy is the relevant budget line and I1, I2, and I3 are indifference curves. The equilibrium position for the consumer is at:
point K.
question Refer to the diagram. The total utility yielded by 4 units of X is:
17
question
The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The marginal utility of the third Pepsi is:
8 units of utility.
question
The substitution effect suggests that when consumers judge product quality by price, they will substitute high-priced products for low-priced products
False
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It is possible for a consumer's indifference curves to intersect.
False
question
Refer to the diagram in which the downsloping lines are budget lines and I1, I2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 2, and 5 are such that:
points 1, 2, and 5 yield equal amounts of utility.
question If the budget line shifts from BB to bb in the diagram, we can infer that the:
price of Y has increased and the price of X has decreased.
question
Susie buys two goods: rounds of golf and massages. Suppose that the price of a round of golf is \$20 and the price of a massage is \$30. In a typical week, Susie will play two rounds of golf, getting 20 units of satisfaction from the second round. She normally buys three massages each week, with the third giving her 30 units of satisfaction. If she were to buy a fourth massage in a week, it would give her 20 units of satisfaction. If the price of massages is reduced to \$15, which of the following outcomes might we expect to occur?
Susie would buy more massages and fewer rounds of golf, as predicted by the substitution effect.
question Refer to the budget line shown in the diagram. The absolute value of the slope of the budget line is:
PC/PD.
question
What do the income effect, the substitution effect, and diminishing marginal utility have in common?
They all help explain the downsloping demand curve.
question Refer to the budget line shown in the diagram. If the consumer's money income is \$20, the:
price of C is \$4 and the price of D is \$2.
question
When a consumer shifts purchases from X to Y, the marginal utility of X falls and the marginal utility of Y rises.
False
question
An increase in the price of product A will:
decrease the marginal utility per dollar spent on A.
question Refer to the diagram. If the budget line shifts from ab to ac, the:
consumer will purchase more of J and less of K.
question
How did Apple overcome consumers' diminishing marginal utility for iPads?
Apple introduced new features to entice previous buyers to purchase new models.
question
Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are \$3 and \$4 respectively and that the consumer's income is \$18. Refer to the data. What level of total utility does the rational consumer realize in equilibrium?
51 utils
question
The theory of consumer behavior assumes that consumers attempt to maximize:
total utility.
question
If the price of product X rises, then the resulting decline in the amount purchased will:
increase the marginal utility of the last unit consumed of this good.
question
Which of the following has been a significant factor in the ability of iPads to compete effectively against laptop and desktop computers?
Many consumers perceive that iPads are superior to laptops and desktop computers for the consumption of digital media.
question
(Consider This) Unlike newspaper dispensing devices, soft drink dispensing machines do not permit people to take more than one can or bottle with each payment. The reason is that the:
marginal utility of extra soft drink cans or bottles declines slowly, particularly because they are storable and can be consumed later.
question
A rational consumer will try to achieve the highest indifference curve that his or her income will allow.
True
question
The theory of consumer behavior assumes that:
consumers behave rationally, attempting to maximize their satisfaction.
question The movement of the budget line from BB to bb in the figure suggests that income has:
fallen and the price of Y has increased.
question
Total utility may be determined by:
summing the marginal utilities of each unit consumed.
question
essential goods may be cheap while nonessential goods may be expensive.
question The shift of the budget line from cd to ab in the figure is consistent with:
a decrease in money income.
question
(Consider This) Newspaper dispensing devices seemingly "trust" people to take only a single paper, but the devices actually rely on the law of:
diminishing marginal utility.
question
Marginal utility is the:
change in total utility obtained by consuming one more unit of a good.
question
Refer to the table and graph. Suppose that the price of X falls from \$2 to \$1, while the price of Y remains at \$4. Which of the following represents the demand curve for X if the consumer has money income of \$10 to spend on X and Y?
D2
question
(Last Word) All of the following would reduce property crime by increasing its "price," except:
cutting out the middlemen ("fences") by selling stolen goods via Internet auction sites.
question
In introducing the opportunity cost of time into the theory of consumer behavior, we find that, all else equal:
one should consume less of time-intensive goods.
question
Refer to the diagram in which the downsloping lines are budget lines and I1, I2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 3, and 5 are such that
3 implies a higher level of utility than does 1 or 5.
question
In moving northeasterly from the origin, we encounter indifference curves that reflect higher and higher levels of total utility.
True
question
Utility refers to the:
satisfaction that a consumer derives from a good or service.
question
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. Refer to the data. What level of total utility will the utility-maximizing consumer realize?
96 utils.
question
Prashanth decides to buy a \$75 ticket to a particular New York professional hockey game rather than a \$50 ticket for a particular Broadway play. We can conclude that Prashanth:
has a higher "marginal utility-to-price ratio" for the hockey game than for the play.
question The budget line shift from ab to cd in the figure is consistent with:
an increase in the price of M and a decrease in the price of N.
question
If you receive a gift whose market price is \$20, but you consider it to be worth only \$10, then:
there is a \$10 or 50 percent value loss.
question
Assume a diagram in which a budget line is imposed on an indifference map. A consumer will maximize her utility:
where the budget line is tangent to an indifference curve.
question
Noncash gift-giving involves value loss when the marginal utility of the gift to the receiver is less than the product price.
True
question
An indifference map implies that:
curves farther from the origin yield higher levels of total utility.
question
A consumer's demand curve for a product is downsloping because:
marginal utility diminishes as more of a product is consumed.
question
The budget line shows:
all possible combinations of two goods that can be purchased, given money income and the prices of the goods.
question
Where total utility is at a maximum, marginal utility is:
zero.
question
Suppose Will Receives 150 utils from consuming one banana and 250 utils from consuming two bananas. What is the marginal utility of the 2nd banana?
100 Utils
question
Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 80, 116, 136, and 150, respectively. The Marginal utility of the sixth wing is _____ utils?
20
question
The law of diminishing utility says that
the marginal utility gained by consuming equal successive units of a good will decline as the amount consumed increases.
question
Suppose you are consuming a particular good and you could somehow give back the last unit you consumed. What would happen to total marginal utility (assuming that the marginal utility of the unit given back is positive)?
Total utility would decrease but marginal utility would increase
question
Suppose you just finished your third plateful of Thanksgiving dinner and it yielded zero units of additional satisfaction. Should you go back for more?
No way. You could get negative utility from the fourth plateful.
question
You and your roommate are eating pizza and have already consumed all but the last slice. Your roommate claims that he is hungrier than you and therefore should get the last slice of pizza. Your roommate has made
an interpersonal utility comparison.
question
Rich has \$100,000 and Poore has \$1,000. Which of these statements is most strongly supported by the theory of consumer choice?
An extra dollar given to Rich is worth less to him than his 100,000th dollar.
question
We would expect the total utility of diamonds to be ____ than the total utility of water.
lower
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We would expect the marginal utility of diamonds to be _____ than the marginal utility of water.
higher
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Suppose you could quantify the amount of satisfaction you receive from consuming ice cream in money terms. You might say, "I expect to get \$3 worth of satisfaction from this ice cream cone." According to traditional economic theory, if the price of this ice cream cone were \$3.05 would you buy one?
No way, because it's not worth it.
question
If a person is receiving greater marginal utility per dollar from consuming one good than another it follows that he or she is
Not maximizing utility
question
Ari is consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost \$2 and hamburgers cost \$2.50, is Ari consuming the correct quantities of these two goods to be in consumer equilibrium?
Yes, so there is no need to change her eating habits.
question
In order for an individual to be achieve consumer equilibrium through the consumption of two goods, A and B, that individual must fulfill the condition
MUa/Pa=MUb/Pb
question
In the Texas A study of "buying" behavior of two white rats, as the "relative price" of one beverage was raised,
both white rats began to consume less of the higher priced beverage.
question
According to the traditional theory of marginal utility as presented in the textbook, as more units of a good are acquired, the consumer's marginal utility
diminishes
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If the marginal utility of a good is negative then
consumers should buy less of it
question
Given two goods, X and Y, their prices Px and Py, a consumer is in equilibrium when the last dollar spent on X yields
the same marginal utility as the last dollar spent on Y.
question
To economists utility means
satisfaction
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The law of diminishing marginal utility
tells us than additional dollar of income is worth less that proceeding dollar of income
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the satisfaction that results from the consumption of a good.
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If the marginal utility of X is negative, then the last unit of X is
question
Research conducted by Nicholas Epley and his colleagues at Harvard showed that people will spend a ____ percentage of money given to them if it is _______ rather than ____
greater, termed a bonus, a rebate
question
There are two goods X and Y, and the absolute price of good Y falls. It follows that
A person can buy more of good Y and the slope of the budge constraint changes.
question
If Smith gives up three units of Y to get one additional unit of X then
his indifference curve is downward sloping
question
An indifference curve shows
the bundles of two goods that give an individual equal total utility
question
The Marginal rate of substitution is illustrated by
slope of the indifference curve
question
The ______ one's income, the ____ one's budget constraint.
larger, further away from the origin.
question
For economists framing refers to the
manner in which a problem is presented.
question
Given the choice between a sure thing option and a gamble option with the same expected pay off, a ______ person will choose the sure thing.
risk averse
question
Implicit in the solution to the diamond water paradox is the idea that prices reflect ____ utility instead of ____ utility