Ch.21 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. Suppose that Jean normally orders three tacos, but on seeing that their price has gone up, decides to buy only two. Jean's decision is best explained by:   (4 points)

    a.  
    b.  
    c.  
    d.  

  2. 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:   (4 points)

    a.  
    b.  
    c.  
    d.  



  3. Refer to the above diagram. The marginal utility of the third unit of X is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  4. Answer the next question(s) on the basis of the following two schedules which show the amounts of additional satisfaction (marginal utility) which a consumer would get from successive quantities of products J and K.



    Refer to the above data. If the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing:   (4 points)

    a.  
    b.  
    c.  
    d.  

  5. Answer the next question(s) on the basis of the following two schedules which show the amounts of additional satisfaction (marginal utility) which a consumer would get from successive quantities of products J and K.



    Refer to the above data. What level of total utility is realized from the equilibrium combination of J and K determined in the previous question?   (4 points)

    a.  
    b.  
    c.  
    d.  

  6. A consumer is maximizing her utility with a particular money income when:   (4 points)

    a.  
    b.  
    c.  
    d.  

  7. Suppose that Ms. Spencer is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $2 and $4 respectively. The marginal utility of the last units of A and B are 16 and 24 respectively. These data suggest that Ms. Spencer:   (4 points)

    a.  
    b.  
    c.  
    d.  

  8. In purchasing products A and B, a consumer is in equilibrium when:   (4 points)

    a.  
    b.  
    c.  
    d.  

  9. The theory of consumer behavior assumes that consumers attempt to maximize:   (4 points)

    a.  
    b.  
    c.  
    d.  

  10. Diminishing marginal utility explains why:   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. Answer the next question(s) 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 above data. What quantities of X and Y should be purchased to maximize utility?   (4 points)

    a.  
    b.  
    c.  
    d.  

  12. Relatively recent theories of consumer behavior have:   (4 points)

    a.  
    b.  
    c.  
    d.  

  13. Most economists contend that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  14. (Last Word) Most people do not steal because:   (4 points)

    a.  
    b.  
    c.  
    d.  

  15. The income effect explains an exception to the law of demand.   (4 points)

    a.  
    b.  

  16. In moving along a given budget line:   (4 points)

    a.  
    b.  
    c.  
    d.  

  17. A change in the slope of a budget line is solely the result of a change in:   (4 points)

    a.  
    b.  
    c.  
    d.  

  18. Other things equal, an increase in a consumer's money income:   (4 points)

    a.  
    b.  
    c.  
    d.  

  19. Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line:   (4 points)

    a.  
    b.  
    c.  
    d.  

  20. An indifference curve:   (4 points)

    a.  
    b.  
    c.  
    d.  



  21. Refer to the above diagram in which the downsloping linear lines are budget lines and I1, I 2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 2, and 5 are such that:   (4 points)

    a.  
    b.  
    c.  
    d.  



  22. Refer to the above diagram. If the budget line shifts from ab to ac the:   (4 points)

    a.  
    b.  
    c.  
    d.  



  23. Refer to the above diagram. The equilibrium points shown in the diagram along with the price change that produced the shift of the budget line from ab to ac:   (4 points)

    a.  
    b.  
    c.  
    d.  

  24. Indifference analysis assumes that utility is numerically measurable.   (4 points)

    a.  
    b.  

  25. The lower the consumer's income, the higher her budget line.   (4 points)

    a.  
    b.  



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