Quiz 7

A  the marginal utility per dollar is the same for both goods

B  the demand curves are flatter reducing quantity

C  the marginal utility per dollar is controlled by trade-offs

D  the quantities demanded change so total utility rises

A  elective surgery due to its lower marginal utility per dollar of expenditure.

B  neither can be compared by measuring marginal utility.

C  mental health therapy due to its higher marginal utility per dollar of expenditure.

D  both programs, which have the same marginal utility per dollar of expenditure.

A  household consumption choice budget and the labor-leisure budget using an utilimometer.

B  budget constraint and low-income housing expenses.

C  marginal utility gained and lost from different choices along the budget constraint.

D  various categories of economic proverbial wisdom

A  be positive, negative, or zero

B  be positive or negative, but not zero

C  increase positively, but not negatively

D  decrease, but not become negative

A  multiplying the marginal utility of the last unit consumed by the number of units consumed.

B  multiplying the marginal utility of the last unit consumed by the unit price.

C  multiplying the marginal utility of the first unit consumed by the number of units consumed.

D  summing up the marginal utilities of each unit consumed.

A  total utility is cumulate and marginal utility is not.

B  total utility is more accurate than marginal utility.

C  total utility is usually larger than marginal utility.

A  total utility decreases.

B  total utility rises, but marginal utility falls.

C  marginal utility increases.

D  total utility decreases, but marginal utility rises.

A  Decline; Diminishing Marginal Utility

B  Decrease; Total Utility

C  Increase; Increasing Marginal Utility

D  Increase; Diminishing Marginal Utility

A  the law of excessive returns

B  increasing marginal utility

C  the law of diminishing returns

A  Utility is impersonal and objective.

B  Utility can be measured like temperature.

C  Utility is personal and subjective.

A  utility

B  opportunity cost

C  contentment

A  Utility is determined by one’s own preferences.

B  Utility is determined by the supply and demand curves.

C  Producers determine utility by averaging the number of utils reported in customer feedback surveys.

A  a parallel shift in her budget line to the left, allowing her to buy less of both goods.

B  a parallel shift in her budget line to the right, allowing her to buy more of both goods.

C  either a shift of the budget line to the right or the left depending on Shannon’s personal preferences.

A  The income effect says that after the price decline, the consumer could purchase the same goods as before, and still have money left over to purchase more

B  The substitution effect says that because the product is cheaper relative to other things the consumer purchases, he or she will tend to buy more of the product.

C  The utility effect says that because the product is cheaper, a person can gain more utils of satisfaction through its purchase.

A  2.25

B  1.5

C  2

A  Dollars are fungible, or have equal value to the individual, regardless of the situation.

B  If you lost $20 today but then found $20 later on, you feel neutral because it’s as if you never lost anything at all.

C  ​If you find $100 on the street, you will be more likely to spend if freely than you would be to take $100 out of your bank account.