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Exam 5: Consumer Choice

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Question 21

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Refer to Figure 19.2.Total utility is maximized at

A) 6 apples.
B) 7 apples.
C) 1 apple.
D) 3 apples.

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Question 22

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Economists focus on the effect of changes in income and prices in influencing actual consumer purchases.

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Question 23

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Marginal utility is the

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. $\begin{array}{llllll}\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\\ \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\\\hline 1&40&40&1&30&30\\2&\_\_\_&32&2&\_\_\_&20\\3&96&24&2&66&16\\4&112&\_\_\_&5&84&\_\_\_&\end{array}$ Table 19.3 Michael's Utility Schedule Refer to Table 19.3.If Michael has $28 dollars to spend, why will three colas and four pretzels not be optimal?

The marginal utility for a good is computed as

Economic explanations of consumer behavior take into consideration

Consumer surplus does not exist because some consumers cannot afford to purchase the product at all.

A budget constraint line represents combinations of two goods that provide an individual the same total utility.

Which industry here is unlikely to exhibit price discrimination?

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. $\begin{array}{llllll}\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\\ \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\\\hline 1&40&40&1&30&30\\2&\_\_\_&32&2&\_\_\_&20\\3&96&24&2&66&16\\4&112&\_\_\_&5&84&\_\_\_&\end{array}$ Table 19.3 Michael's Utility Schedule The marginal utility per dollar of the third pretzel is

The four determinants of demand that are held constant when we consider a movement along a demand curve include all of the following except

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. $\begin{array}{llllll}\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\\ \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\\\hline 1&40&40&1&30&30\\2&\_\_\_&32&2&\_\_\_&20\\3&96&24&2&66&16\\4&112&\_\_\_&5&84&\_\_\_&\end{array}$ Table 19.3 Michael's Utility Schedule In Table 19.3, what is the total utility of two units of cola?

If a good had a zero price (i.e., the good was free) , a rational person would consume

Utility maximization is always achieved where total revenue is maximized.

An indifference curve shows the

Which of these examples is an example of price discrimination?

The farther an indifference curve is from the origin, the more total utility it yields.

An indifference map shows

Marginal utility represents the additional satisfaction obtained from one more unit of a good or service.

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.Point D on the graph