question
If Bella eats one piece of pie, she gains a utility of 10. If she continues, a second piece yields a marginal utility of 8, a third will yield a marginal utility of 2, and a fourth will yield a marginal utility of -2. Which of the following statements is true?
answer
Bella's total utility will be maximized if she eats three pieces of pie.
question
What is a bundle in terms of utility?
answer
A specific combination of goods and services an individual could consume.
question
Gabriel has set aside $150 each month for his favorite activities, going to movies and going to concerts. The price of a movie ticket is $15, and the price of a concert ticket is $30. He currently goes to six movies and two concerts each month. Suppose the price of a movie ticket falls to $10, as a result, Gabriel decides to go to seven movies and three concerts each month. Which of the following statements is true?
answer
The income effect outweighs the substitution effect.
question
Assume Dawn's Budget constraint is represented in the graph. If Dawn's income increases and she spends all her income on these two goods, then Dawn's total utility from consuming these two goods will likely:
answer
Increase, because she can afford more of both good now
question
Assume Kevin has $48 to spend on the two items in the graph shown. If books cost $12, which line represents Kevin's budget constraint?
answer
Either line A or B
question
If Xavier's budget constraint is represented in the garage him and the price of a bag of chips is $3, which is Xavier's income?
answer
$27
question
Ethan has $150 a month to spend on to normal goods, books and movie theater tickets. The price of a book is $15 and the price of a movie ticket is also $15. He currently consumes four books and six movies each month. If the price of a book drops to $10 the substitution effect predicts that Ethan will consume:
answer
More books and fewer movies
question
Linus has just watched two hours of TV. Which of the following is likely true?
answer
His second hour of watching TV added less to his total utility than did the first.
question
According to revealed preference, a consumer that chooses to smoke cigarettes:
answer
Derives more utility from smoking then from other goods that could have been purchased with the money spent on cigarettes.
question
Neema has an hour of free time she can spend doing one of three activities. Spending our reading would give her a utility of 4, playing video games will give her a utility of 2 and jogging would give her a utility of 6. Based on this information economics could predict that Neema will:
answer
Go jogging.
question
Quinn has $100 A month to spend on to normal goods, bowling and eating out. It cost $10 to bowl for the night, and it cost $20 for Quinn to eat at a restaurant. Queen currently consumes four nights of bowling and three meals at a restaurant each month if the price of a Night of bowling increases to $15, the income affect predicts that Quinn well:
answer
Decrease her consumption of both Bowling and eating out.
question
If the graph showing represent Jordon's budget constraint, which of the following must be true?
answer
Jordon could consume either four salads or eight burritos.
question
Rational utility maximizing consumers tend to:
answer
Change their consumption choices when either prices or income changes.
question
Which of the following statements about a budget constraint is true?
answer
Each bundle gives an individual a different amount of utility, but cost the same amount of money.
question
Assume Kayla's budget constraint is represented in the grass shown. If the price of a comic book decreases, the slope of Kayla's budget constraint will become __________, reflecting the fact that __________ are now relatively ________ expensive.
answer
steeper; comic books; less
question
Utility measurements are:
answer
a relative ranking of the satisfaction a person gets from alternative combinations of things.
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