Eco08L3

  • 1

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    Lily has $20 to spend each week on fish and chicken. Fish costs $4 a serving and chicken costs $6 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume _______ servings of chicken and _______ of fish each week.

    eco08001.gif

    2; 2
    4; 0
    1; 3
    0; 5

  • 2

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    The table shows Elaine's utility from pizza and hamburgers. If Elaine consumes 2 slices of pizza and 2 hamburgers, her marginal utility from an additional slice of pizza is ________units.

    eco08002.gif

    25
    50
    150
    175

  • 3

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    Elaine spends $10 a week on pizza and hamburgers. The price of pizza is $2 a slice and the price of a hamburger is $2. The table shows Elaine's utility from pizza and hamburgers. Elaine maximizes her total utility by buying __________ slices of pizza and _________ hamburgers a week.

    eco08003.gif

    2; 3
    0; 5
    3; 2
    5; 0

  • 4

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    Terry spends $20 a month on CDs and magazines. The price of a CD is $8 and the price of a magazine is $4. When Terry maximizes his utility, the marginal utility from CDs is _____________ the marginal utility from newspapers.

    twice
    less than
    the same as
    half

  • 5

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    Roberta spends all of her income on two items, staplers and paper clips. If the price of a stapler increases, you predict that there will be a _______ Roberta's demand curve for staplers and a _______ Roberta's demand curve for paper clips.

    movement along; rightward shift of
    rightward shift of; leftward shift of
    movement along; leftward shift of
    leftward shift of; movement along

  • 6

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    Jeremiah spends all of his income on oranges and cookies, which are normal goods. If Jeremiah's income decreases, he will buy __________oranges and __________ cookies. His marginal utility from oranges will ____________ and his marginal utility from cookies will _____________.

    fewer; fewer; increase; increase
    more; fewer; decrease; decrease
    the same quantity of; fewer; remain constant; decrease
    fewer; fewer; decrease; increase

  • 7

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    Pam buys only rings and bangles, and she buys the quantities that maximize her utility. Her marginal utility from rings is 20 units and her marginal utility from bangles is 60 units. If the price of a bangle is $12, then you are sure that the price of a ring is ________.

    $4
    $2
    $12
    $6

  • 8

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    Danny has $8 to spend on two goods: pies and soda. The price of a pie is $2, and the price of a can of soda is $2. To maximize his utility, Danny buys ___________________________.

    the combination that totals 4 and that gives him the same marginal utility from pies as from soda
    the combination that totals 4 and that gives him equal total utility from pies and soda
    only pies as they are a better price
    2 pies and 2 cans of soda

  • 9

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    Steve is in a consumer equilibrium, then the price of a car wash decreases from $6 is $4, Steve increases the number of car washes ____________.

    and increases his total utility
    and all of the above are true
    and decreases the quantity of other goods he buys
    so that the marginal utility per dollar spent on car washes is the same as it was when the price was $6

  • 10

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    Which of the following statements is true?

    Total utility is greater than or equal to marginal utility.
    Utility is gained by wanting a good.
    Utility units are observable.
    Utility theory predicts that marginal utility diminishes as more of any good is consumed.

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