Question 1

Zachary spends his day off studying for a total of four hours and exercising for one hour. Using the concept of utility to explain his choices, which of the following is true?

Accepted Answer

A)  The total utility he received from exercising for one hour was greater than the total utility he received from studying for four hours.
B)  The marginal utility he received from exercising for the first hour was greater than the marginal utility he received from studying for the first hour.
C)  The marginal utility he would have received from studying for a fifth hour would have been negative.
D)  The marginal utility he would have received from studying for a fifth hour would have been less than the marginal utility he received from the first hour of exercise.

Question 2

The slope of a budget constraint:

Accepted Answer

A)  represents the opportunity cost of the two goods relative to each other.
B)  represents the relative marginal utilities from consuming the two goods.
C)  measures the total utility the consumer gets from consuming the two goods.
D)  is the consumer's income level.

Question 3

If Bohai has one piece of gum in his mouth, he receives a utility of 12. If he puts a second piece of gum in his mouth, he will receive a marginal utility of 6. Adding a third piece will give a marginal utility of 1, and adding a fourth piece will cause Bohai to gag, yielding a marginal utility of -4. Which of the following statements is true?

Accepted Answer

A)  Bob's total utility from chewing four pieces of gum would be 23.
B)  Bob's total utility will decrease if he chews the fourth piece of gum.
C)  Bob's total utility will be maximized if he eats two pieces of gum.
D)  Bob's total utility will decrease after the first piece of gum.

Question 4

The table shown describes the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items.

If Jack decides to consume bundle D, we can conclude that he:

Accepted Answer

A)  still has money left to spend.
B)  is not maximizing his utility.
C)  could consume more of both goods.
D)  All of these are correct.

Question 5

The substitution effect can be defined as the change in consumption that results from:

Accepted Answer

A)  a change in the relative prices of goods.
B)  increased effective wealth due to lower prices.
C)  increased effective wealth due to increased income.
D)  consumption change in income due to lower prices.

Question 6

If Imani's budget constraint is represented in the graph shown, what trade-off does she face in terms of these two goods?

Accepted Answer

A)  Two cases of soda for every three gallons of milk
B)  One case of soda for every one and a half gallons of milk
C)  Three cases of soda for every four and a half gallons of milk
D)  All of these accurately reflect Imani's tradeoff.

Question 7

Linus has just watched two hours of TV. Which of the following is likely true?

Accepted Answer

A)  His second hour of watching TV reduced his total utility.
B)  His second hour of watching TV added less to his total utility than did the first.
C)  His third hour of watching TV will decrease his total utility.
D)  His third hour of watching TV will increase his total utility by at least as much as the second.

Question 8

Pranav is deciding what to drink from a cooler that contains cans of soda pop and iced tea. When Pranav chooses iced tea, we assume that he will receive more utility from drinking iced tea than soda pop. Which economic concept is this conclusion based on?

Accepted Answer

A)  Revealed preference
B)  Utility minimization
C)  Satisfaction scales
D)  Rational behavior

Question 9

After browsing his cabinets to see what meals he can make, Ken is deciding whether to make tacos or spaghetti for dinner. If Ken makes spaghetti, we can conclude:I. Ken would receive zero utility from eating tacos.II. Eating spaghetti for dinner will give Ken more utility than eating tacos.III. Eating spaghetti for dinner will give Ken positive utility.

Accepted Answer

A)  III only
B)  II only
C)  II and III only
D)  I, II and III

Question 10

If the graph shown represents Damien's budget constraint, what can be said about burritos?

Accepted Answer

A)  Burritos cost twice as much as salads.
B)  Burritos cost half as much as salads.
C)  Damien likes burritos more than salads.
D)  Damien is willing to pay twice as much for burritos as he is for salads.

Question 11

Assume Claudia's budget constraint is represented by line A in the graph shown. Which of the following would cause Claudia's budget constraint to shift to line C?

Accepted Answer

A)  The price of books decreases.
B)  The price of movie tickets decreases.
C)  Claudia's preferences for these two goods decrease.
D)  Claudia's income decreases.

Question 12

A budget constraint is a line that is composed of:

Accepted Answer

A)  all possible combinations of goods and services that maximize a consumer's total utility.
B)  the additional utility gained from consuming all possible combinations of goods and services.
C)  all possible combinations of goods and services that a consumer can buy with his or her income.
D)  the total utility gained from consuming all possible combinations of goods and services with a certain income.

Question 13

Assume Alan's budget constraint is represented by line A in the graph shown. Which of the following would cause Alan's budget constraint to move to line B?

Accepted Answer

A)  Alan experiences a drop in income.
B)  The price of books increases.
C)  Alan decides he doesn't like going to the movies as much as he used to.
D)  The price of movie tickets increases.

Question 14

A budget constraint shows different bundles of goods that all:

Accepted Answer

A)  yield the same total utility.
B)  cost the same amount.
C)  maximize an individual's utility.
D)  maximize total utility at varying levels of income.

Question 15

Assume Roger has $48 to spend on books and movie tickets and his budget constraint is represented by line B in the graph shown. What would cause his budget constraint to move to line A?

Accepted Answer

A)  Roger gets a raise at work.
B)  Roger gets unlimited coupons for $2 off the price of a movie ticket.
C)  The price of movie tickets increases to $8.
D)  None of these changes would cause Roger's budget constraint to move from line B to line A.

Question 16

Suppose Bill has $48 to spend on the two items in the graph shown. If movie tickets cost $8, which line represents Bill's budget constraint?

Accepted Answer

A)  Line A
B)  Line B
C)  Line C
D)  Either line A or B

Question 17

What is reciprocity?

Accepted Answer

A)  Responding to another's actions with a similar action.
B)  Deriving utility from an action that will cause another's utility to increase.
C)  Doing good things for people and asking nothing in return.
D)  Deriving utility from a stranger's actions.

Question 18

The concept of utility can be used to explain why people are:I. charitable.II. altruistic.III. selfish.

Accepted Answer

A)  III only
B)  I and II only
C)  None of these
D)  I, II, and III

Question 19

Manu offers to buy his friend lunch after helping him study for an exam. This is an example of the economic concept of:

Accepted Answer

A)  marginal utility.
B)  altruism.
C)  reciprocity.
D)  a Veblen good.

Question 20

Rational utility maximizing consumers tend to:

Accepted Answer

A)  buy the same bundle of goods regardless of the prices charged.
B)  choose the same bundle of goods regardless of their income.
C)  change their consumption choices when either prices or income changes.
D)  change their consumption choices only when both prices and income change simultaneously.

Exam 7: Consumer Behavior

If Imani's budget constraint is represented in the graph shown, what trade-off does she face in terms of these two goods?

Correct Answer
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The table shown describes the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items. If Jack decides to consume bundle D, we can conclude that he:

Correct Answer
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Correct Answer
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Linus has just watched two hours of TV. Which of the following is likely true?

Correct Answer
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Assume Claudia's budget constraint is represented by line A in the graph shown. Which of the following would cause Claudia's budget constraint to shift to line C?

Correct Answer
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Assume Alan's budget constraint is represented by line A in the graph shown. Which of the following would cause Alan's budget constraint to move to line B?

Correct Answer
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Pranav is deciding what to drink from a cooler that contains cans of soda pop and iced tea. When Pranav chooses iced tea, we assume that he will receive more utility from drinking iced tea than soda pop. Which economic concept is this conclusion based on?

Correct Answer
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What is reciprocity?

Correct Answer
verified

Manu offers to buy his friend lunch after helping him study for an exam. This is an example of the economic concept of:

Correct Answer
verified

If the graph shown represents Damien's budget constraint, what can be said about burritos?

Correct Answer
verified

A budget constraint shows different bundles of goods that all:

Correct Answer
verified

The concept of utility can be used to explain why people are:I. charitable.II. altruistic.III. selfish.

Correct Answer
verified

A budget constraint is a line that is composed of:

Correct Answer
verified

Correct Answer
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Zachary spends his day off studying for a total of four hours and exercising for one hour. Using the concept of utility to explain his choices, which of the following is true?

Correct Answer
verified

The slope of a budget constraint:

Correct Answer
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The substitution effect can be defined as the change in consumption that results from:

Correct Answer
verified

Rational utility maximizing consumers tend to:

Correct Answer
verified

Assume Roger has $48 to spend on books and movie tickets and his budget constraint is represented by line B in the graph shown. What would cause his budget constraint to move to line A?

Correct Answer
verified

Suppose Bill has $48 to spend on the two items in the graph shown. If movie tickets cost $8, which line represents Bill's budget constraint?

Correct Answer
verified

Exam 7: Consumer Behavior

If Imani's budget constraint is represented in the graph shown, what trade-off does she face in terms of these two goods?

Correct AnswerverifiedShow Answer

The table shown describes the different combinations of goods that Jack can consume, given that he has $10 to spend on these two items. If Jack decides to consume bundle D, we can conclude that he:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Linus has just watched two hours of TV. Which of the following is likely true?

Correct AnswerverifiedShow Answer

Assume Claudia's budget constraint is represented by line A in the graph shown. Which of the following would cause Claudia's budget constraint to shift to line C?

Correct AnswerverifiedShow Answer

Assume Alan's budget constraint is represented by line A in the graph shown. Which of the following would cause Alan's budget constraint to move to line B?

Correct AnswerverifiedShow Answer

Pranav is deciding what to drink from a cooler that contains cans of soda pop and iced tea. When Pranav chooses iced tea, we assume that he will receive more utility from drinking iced tea than soda pop. Which economic concept is this conclusion based on?

Correct AnswerverifiedShow Answer

What is reciprocity?

Correct AnswerverifiedShow Answer

Manu offers to buy his friend lunch after helping him study for an exam. This is an example of the economic concept of:

Correct AnswerverifiedShow Answer

If the graph shown represents Damien's budget constraint, what can be said about burritos?

Correct AnswerverifiedShow Answer

A budget constraint shows different bundles of goods that all:

Correct AnswerverifiedShow Answer

The concept of utility can be used to explain why people are:I. charitable.II. altruistic.III. selfish.

Correct AnswerverifiedShow Answer

A budget constraint is a line that is composed of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Zachary spends his day off studying for a total of four hours and exercising for one hour. Using the concept of utility to explain his choices, which of the following is true?

Correct AnswerverifiedShow Answer

The slope of a budget constraint:

Correct AnswerverifiedShow Answer

The substitution effect can be defined as the change in consumption that results from:

Correct AnswerverifiedShow Answer

Rational utility maximizing consumers tend to:

Correct AnswerverifiedShow Answer

Assume Roger has $48 to spend on books and movie tickets and his budget constraint is represented by line B in the graph shown. What would cause his budget constraint to move to line A?

Correct AnswerverifiedShow Answer

Suppose Bill has $48 to spend on the two items in the graph shown. If movie tickets cost $8, which line represents Bill's budget constraint?

Correct AnswerverifiedShow Answer

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