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The table below shows the total utility associated with various units of goods X and Y.Table 7.5 The table below shows the total utility associated with various units of goods X and Y.Table 7.5 -In an indifference map, one would most likely see indifference curves that: A) are positively sloped. B) intersect at the origin. C) cross at the equilibrium point. D) are bowed inward toward the origin. E) represent greater utility as they approach the origin. -In an indifference map, one would most likely see indifference curves that:


A) are positively sloped.
B) intersect at the origin.
C) cross at the equilibrium point.
D) are bowed inward toward the origin.
E) represent greater utility as they approach the origin.

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The table below shows the total utility associated with various units of goods X and Y.Table 7.5 The table below shows the total utility associated with various units of goods X and Y.Table 7.5 -_____ is the understanding that perfect information is not likely to be available, and that as a result, people make decisions that in hindsight look irrational, but in reality are the rational results of a brain that is economizing. A) Reasoning B) Parametric determinism C) Rational ignorance D) Bounded rationality E) Dynamic inconsistency -_____ is the understanding that perfect information is not likely to be available, and that as a result, people make decisions that in hindsight look irrational, but in reality are the rational results of a brain that is economizing.


A) Reasoning
B) Parametric determinism
C) Rational ignorance
D) Bounded rationality
E) Dynamic inconsistency

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The table given below depicts the total utility derived from the consumption of a good.Table 7.1 The table given below depicts the total utility derived from the consumption of a good.Table 7.1 -In the theory of utility, it is assumed that marginal utility: A) increases as the consumption of a product increases. B) is always zero irrespective of any increase or decrease in consumption. C) remains constant when consumption of a product increases. D) diminishes as the consumption of a product increases. E) remains constant when the consumption of a product decreases. -In the theory of utility, it is assumed that marginal utility:


A) increases as the consumption of a product increases.
B) is always zero irrespective of any increase or decrease in consumption.
C) remains constant when consumption of a product increases.
D) diminishes as the consumption of a product increases.
E) remains constant when the consumption of a product decreases.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Marginal utility is negative when total utility is increasing. -Marginal utility is negative when total utility is increasing.

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Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -Due to the law of diminishing marginal utility, _____.


A) the first unit of a product offers more satisfaction than the last unit of the same product
B) the marginal utility curve is upward sloping
C) when marginal utility becomes negative, total utility increases
D) marginal utility is zero when total utility is zero
E) when marginal utility becomes positive, total utility declines

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -A utility-maximizing consumer always purchases a good that yields the greatest average utility per dollar of expenditure. -A utility-maximizing consumer always purchases a good that yields the greatest average utility per dollar of expenditure.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -In utility analysis, it is assumed that marginal utility diminishes as consumption of a product decreases. -In utility analysis, it is assumed that marginal utility diminishes as consumption of a product decreases.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -The law of diminishing marginal utility states that as additional units are consumed, satisfaction per unit will decline. -The law of diminishing marginal utility states that as additional units are consumed, satisfaction per unit will decline.

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The table given below depicts the total utility derived from the consumption of a good.Table 7.1 The table given below depicts the total utility derived from the consumption of a good.Table 7.1 -According to Table 7.1, the total utility from consuming all 5 units is _____ utils. A) 13 B) 55 C) 64 D) 188 E) 303 -According to Table 7.1, the total utility from consuming all 5 units is _____ utils.


A) 13
B) 55
C) 64
D) 188
E) 303

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. The consumer should purchase more bananas and fewer apples in order to maximize utility. -Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. The consumer should purchase more bananas and fewer apples in order to maximize utility.

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The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -As the price of a good increases: A) that good will yield less satisfaction per dollar than before. B) consumers will have more real income to spend on other goods. C) the quantity demanded of that good will also increase. D) the utility-maximizing quantity of that good willl not change. E) consumers will buy the good and substitute away from other goods. -As the price of a good increases:


A) that good will yield less satisfaction per dollar than before.
B) consumers will have more real income to spend on other goods.
C) the quantity demanded of that good will also increase.
D) the utility-maximizing quantity of that good willl not change.
E) consumers will buy the good and substitute away from other goods.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. This implies the consumer should purchase more apples and fewer bananas in order to maximize utility. -Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. This implies the consumer should purchase more apples and fewer bananas in order to maximize utility.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -With an increase in income, the consumer will maximize utility on a new indifference curve that represents a higher level of utility. -With an increase in income, the consumer will maximize utility on a new indifference curve that represents a higher level of utility.

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The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -Consumers should allocate their income so that the marginal utility associated with the: A) first dollar spent is equal for all goods. B) last dollar spent is equal for all goods. C) last dollar spent is lower for high-priced items than for low-priced items. D) first dollar spent is greater for high-priced items than for low-priced items. E) first dollar spent is less for high-priced items than for low-priced items. -Consumers should allocate their income so that the marginal utility associated with the:


A) first dollar spent is equal for all goods.
B) last dollar spent is equal for all goods.
C) last dollar spent is lower for high-priced items than for low-priced items.
D) first dollar spent is greater for high-priced items than for low-priced items.
E) first dollar spent is less for high-priced items than for low-priced items.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -A price change triggers the income effect but not the substitution effect. -A price change triggers the income effect but not the substitution effect.

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The table below shows the total utility associated with various units of goods X and Y.Table 7.5 The table below shows the total utility associated with various units of goods X and Y.Table 7.5 -Which of the following sentences, based on the findings of neuroeconomics, is true? A) Logical decision-making takes place in the limbic system. B) Emotional decision-making takes place in the prefrontal cortex. C) The prefrontal cortex confuses the logical side of the brain by bringing in emotions, and in some cases it takes over and demands immediate gratification. D) Adults have greater activity in their frontal lobes and lower activity in their amygdala than do teenagers. E) The amygdala takes a long-term perspective on the decision-making, looking at logical cost-benefit comparisons. -Which of the following sentences, based on the findings of neuroeconomics, is true?


A) Logical decision-making takes place in the limbic system.
B) Emotional decision-making takes place in the prefrontal cortex.
C) The prefrontal cortex confuses the logical side of the brain by bringing in emotions, and in some cases it takes over and demands immediate gratification.
D) Adults have greater activity in their frontal lobes and lower activity in their amygdala than do teenagers.
E) The amygdala takes a long-term perspective on the decision-making, looking at logical cost-benefit comparisons.

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The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Consumer equilibrium exists when the marginal utility per dollar of expenditure is the same for all goods and services. -Consumer equilibrium exists when the marginal utility per dollar of expenditure is the same for all goods and services.

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Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -_____ is the lack of satisfaction yielded after consuming too much of the same product.


A) Ordinal utility
B) Disutility
C) Total utility
D) Marginal utility
E) Cardinal utility

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The table below shows the total utility associated with various units of goods X and Y.Table 7.5 The table below shows the total utility associated with various units of goods X and Y.Table 7.5 -Buyers who are persuaded to take a product home to try it out, _____. A) are likely to return the product later B) are lucky the seller is not concerned about the buyers' credit ratings C) will not derive any utility from that product. D) have no money to pay at the time E) will be reluctant to return the product when payment is due -Buyers who are persuaded to take a product home to try it out, _____.


A) are likely to return the product later
B) are lucky the seller is not concerned about the buyers' credit ratings
C) will not derive any utility from that product.
D) have no money to pay at the time
E) will be reluctant to return the product when payment is due

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Scenario 5.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px. Assume that P = $8, I = 200, and Px = $10. -The law of diminishing marginal utility states that:


A) the marginal utility of the last unit consumed of any good is less than the marginal utility of all other products consumed.
B) as more of a good or service is consumed, the marginal utility derived from it, relative to other products, increases.
C) as more of a good or service is consumed, the marginal utility derived from it decreases.
D) as more of a good or service is consumed, the marginal utility derived from it, relative to other products, remains the same.
E) the marginal utility of all products consumed must be equal.

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