Question 1

Ricardo eats 20 pieces of sushi on a Friday night. When he eats the 21st piece, he starts to feel nauseous and realizes he probably should not have eaten the last piece. This suggests that for Ricardo the

Accepted Answer

A)   marginal utility of the 21st piece of sushi is positive and increasing.
B)   marginal utility of the 21st piece of sushi is negative.
C)   total utility of pieces of sushi is increasing.
D)   total utility of pieces of sushi is increasing by larger and larger increments.

Question 2

Refer to the information provided in Figure 6.2 below to answer the question(s)  that follow.  Figure 6.2
-Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is

Accepted Answer

A)   an available option and Mr. Lingle exactly spends all of his income.
B)   an available option and Mr. Lingle does not spend all of his income.
C)   in Mr. Lingle's opportunity set but is not on his budget constraint.
D)   not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.

Question 3

Assume leisure is an inferior good instead of a normal good. The income effect of a wage decrease will lead to a ________ demand for leisure and a ________ labor supply.

Accepted Answer

A)   higher; higher
B)   higher; lower
C)   lower; higher
D)   lower; lower

Question 4

When the price of a good increases, the budget constraint shifts in parallel to the original budget constraint.

Accepted Answer

A) True 
 B)False

Question 5

Refer to the information provided in Figure 6.6 below to answer the question(s)  that follow.  Figure 6.6
-Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income

Accepted Answer

A)   increased.
B)   decreased.
C)   did not change but the price of black beans decreased.
D)   did not change but the price of black beans increased.

Question 6

An indifference curve is a set of points, each point representing a combination of two goods, all of which represent the same total utility.

Accepted Answer

A) True 
 B)False

Question 7

If MUx/Px > MUy/Py, then

Accepted Answer

A)   spending a dollar less on Y and a dollar more on X increases utility.
B)   spending a dollar less on X and a dollar more on Y increases utility.
C)   X is more expensive than Y.
D)   Y is more expensive than X.

Question 8

Marginal utility is the ________ satisfaction gained by consuming ________ of a good.

Accepted Answer

A)   total; all units
B)   total; one more unit
C)   additional; all units
D)   additional; one more unit

Question 9

Refer to the information provided in Table 6.1 below to answer the question(s)  that follow.
Table 6.1
 
-Refer to Table 6.1. The marginal utility of the second hamburger per day is

Accepted Answer

A)   10.
B)   15.
C)   22.
D)   52.

Question 10

Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that

Accepted Answer

A)   the avocado and crab dip cannot have tasted that good.
B)   the avocado and crab dip with crackers now has a marginal utility of zero.
C)   at this point cheese and crackers have a higher marginal utility per dollar spent than that of avocado and crab dip with crackers.
D)   Kathleen is no longer maximizing her utility.

Question 11

If a household's income rises by 30%, its budget constraint will

Accepted Answer

A)   shift out parallel to the old one.
B)   pivot at the Y-intercept.
C)   shift in parallel to the old one.
D)   be unaffected.

Question 12

Refer to the information provided in Table 6.2 below to answer the question(s)  that follow.
Table 6.2
 
-Refer to Table 6.2. If the price of a candy bar is $1, the price of a hot dog is $2, and Aaron has $6 of income, Aaron's utility-maximizing combination of candy bars and hot dogs per day is

Accepted Answer

A)   1 candy bar and 2 hot dogs.
B)   4 candy bars and 1 hot dog.
C)   2 candy bars and 1.5 hot dogs.
D)   indeterminate from this information.

Question 13

Refer to the information provided in Figure 6.2 below to answer the question(s)  that follow.  Figure 6.2
-Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is

Accepted Answer

A)   1/4 of a gardenburger.
B)   1 gardenburger.
C)   2 gardenburgers.
D)   changing as Mr. Lingle moves down his budget constraint.

Exam 6: Household Behavior and Consumer Choice

Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2 -Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is

Correct Answer
verified

Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2 -Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is

Correct Answer
verified

Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that

Correct Answer
verified

Refer to the information provided in Table 6.2 below to answer the question(s) that follow. Table 6.2 -Refer to Table 6.2. If the price of a candy bar is $1, the price of a hot dog is $2, and Aaron has $6 of income, Aaron's utility-maximizing combination of candy bars and hot dogs per day is

Correct Answer
verified

Refer to the information provided in Table 6.1 below to answer the question(s) that follow. Table 6.1 -Refer to Table 6.1. The marginal utility of the second hamburger per day is

Correct Answer
verified

Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6 -Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income

Correct Answer
verified

Marginal utility is the satisfaction gained by consuming of a good.

Correct Answer
verified

Assume leisure is an inferior good instead of a normal good. The income effect of a wage decrease will lead to a demand for leisure and a labor supply.

Correct Answer
verified

If MU_x/P_x > MU_y/P_y, then

Correct Answer
verified

When the price of a good increases, the budget constraint shifts in parallel to the original budget constraint.

Correct Answer
verified

An indifference curve is a set of points, each point representing a combination of two goods, all of which represent the same total utility.

Correct Answer
verified

If a household's income rises by 30%, its budget constraint will

Correct Answer
verified

Ricardo eats 20 pieces of sushi on a Friday night. When he eats the 21st piece, he starts to feel nauseous and realizes he probably should not have eaten the last piece. This suggests that for Ricardo the

Correct Answer
verified

Exam 6: Household Behavior and Consumer Choice

Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2 -Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is

Correct AnswerverifiedShow Answer

Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2 -Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is

Correct AnswerverifiedShow Answer

Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that

Correct AnswerverifiedShow Answer

Refer to the information provided in Table 6.2 below to answer the question(s) that follow. Table 6.2 -Refer to Table 6.2. If the price of a candy bar is $1, the price of a hot dog is $2, and Aaron has $6 of income, Aaron's utility-maximizing combination of candy bars and hot dogs per day is

Correct AnswerverifiedShow Answer

Refer to the information provided in Table 6.1 below to answer the question(s) that follow. Table 6.1 -Refer to Table 6.1. The marginal utility of the second hamburger per day is

Correct AnswerverifiedShow Answer

Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6 -Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income

Correct AnswerverifiedShow Answer

Marginal utility is the ________ satisfaction gained by consuming ________ of a good.

Correct AnswerverifiedShow Answer

Assume leisure is an inferior good instead of a normal good. The income effect of a wage decrease will lead to a ________ demand for leisure and a ________ labor supply.

Correct AnswerverifiedShow Answer

If MUx/Px > MUy/Py, then

Correct AnswerverifiedShow Answer

When the price of a good increases, the budget constraint shifts in parallel to the original budget constraint.

Correct AnswerverifiedShow Answer

An indifference curve is a set of points, each point representing a combination of two goods, all of which represent the same total utility.

Correct AnswerverifiedShow Answer

If a household's income rises by 30%, its budget constraint will

Correct AnswerverifiedShow Answer

Ricardo eats 20 pieces of sushi on a Friday night. When he eats the 21st piece, he starts to feel nauseous and realizes he probably should not have eaten the last piece. This suggests that for Ricardo the

Correct AnswerverifiedShow Answer

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Correct Answer
verified

Correct Answer
verified

Marginal utility is the satisfaction gained by consuming of a good.

Correct Answer
verified

Assume leisure is an inferior good instead of a normal good. The income effect of a wage decrease will lead to a demand for leisure and a labor supply.

Correct Answer
verified

If MU_x/P_x > MU_y/P_y, then

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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