Question 1

Grace has just eaten a slice of pizza and says it gave her a utility of 8.If she chooses to eat a second slice:

Accepted Answer

A)   she will experience a drop in total utility.
B)   she is not acting rationally.
C)   she will experience an increase in total utility.
D)   None of these is true.E) A) and B)
F) A) and C)

Question 2

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

Accepted Answer

A)   The price of books increased.
B)   The price of books decreased.
C)   The price of movie tickets increased.
D)   The price of movie tickets decreased.E) A) and B)
F) A) and C)

Question 3

Linus has just watched two hours of TV.We can say:

Accepted Answer

A)   his second hour of watching TV likely reduced his total utility.
B)   his second hour of watching TV likely added less to his total utility than did the first.
C)   if he watches a third hour it will likely decrease his total utility.
D)   if he watches a third hour it will likely increase his total utility by at least as much as the second.E) A) and C)
F) All of the above

Question 4

Courtney goes for an hour bike ride which yields a marginal utility of 8.She stops and gets an ice cream cone,and then rides her bike for another hour.We can say:

Accepted Answer

A)   the utility gained from a second ice cream cone was more than a second hour of bike riding.
B)   the utility gained from the ice cream was more than 8.
C)   the utility gained from the ice cream was less than the second hour of bike riding.
D)   the utility gained from a third hour of biking would be less than the utility gained from the one ice cream.E) A) and B)
F) A) and C) D

Question 5

If the graph shown represents Taylor's budget constraint,which of the following consumption bundles could Taylor choose?

Accepted Answer

A)   Taylor cannot choose to consume any of these bundles
B)   Two pairs of earrings and six hairbands
C)   One pair of earrings and six hairbands
D)   Four pairs of earrings and eight hairbandsE) B) and C)
F) C) and D)

Question 6

Utility measurements are:

Accepted Answer

A)   a relative ranking of how much different people enjoy a particular good.
B)   used to compare one person's preference for a good to another person's preference.
C)   a relative ranking of the satisfaction a person gets from alternative combinations of things.
D)   None of these is true.E) A) and D)
F) A) and C)

Question 7

This table shows the different combinations of goods that Jack can consume,given that his income to spend on these two items is $10.  Considering the information in the table shown,Jack's total utility from consuming bundle D would be:

Accepted Answer

A)   1,160.
B)   1,300.
C)   950.
D)   2,220.E) All of the above
F) None of the above

Question 8

According to revealed preference a consumer that chooses to smoke cigarettes:

Accepted Answer

A)   derives more utility from smoking than the goods they could have purchased with that same money.
B)   derives more happiness from smoking than the goods they could have purchased with that same money.
C)   is minimizing their utility given the options available to them.
D)   is behaving irrationally.E) C) and D)
F) B) and C)

Question 9

The concept of marginal utility:

Accepted Answer

A)   explains why individuals find it difficult to maximize their total utility.
B)   is the change in total utility that comes from consuming one additional unit of a good or service.
C)   can only be applied to situations in which individuals can choose among several goods or services.
D)   is the loss in utility from making a bad decision.E) None of the above
F) B) and D)

Question 10

This graph shows three different budget constraints: A,B,and C.  If Larry has budget constraint B in the graph shown,what is his opportunity cost of one gallon of milk?

Accepted Answer

A)  It is 6 cases of soda.
B)  It is exactly one case of soda.
C)  It is less than one case of soda.
D)  It is more than one case of soda.E) All of the above
F) A) and B)

Question 11

You decide to buy your friend lunch after she helped you study for your exam.This is an example of the economic concept of:

Accepted Answer

A)   marginal utility.
B)   altruism.
C)   reciprocity.
D)   a Veblen good.E) B) and C)
F) All of the above

Question 12

Bobby makes a New Year's resolution to lose weight.On January 3rd,he decides to go to Ben amp; Jerry's for ice cream instead of going to the gym.Using the concept of revealed preference,economists would most likely conclude that Bobby:

Accepted Answer

A)   is not a rational individual.
B)   actually gains more utility from ice cream than working out.
C)   has changed his preferences.
D)   has no choice over the actions he takes.E) None of the above
F) A) and B)

Question 13

This graph shows three different budget constraints: A,B,and C.  If Bart has budget constraint A in the graph shown,what would cause his budget constraint to shift to B?

Accepted Answer

A)  Bart's income has decreased.
B)  The price of soda has increased.
C)  The price of soda has decreased.
D)  The price of milk has increased.E) A) and B)
F) None of the above

Question 14

Quinn's income to spend each month on two normal goods,bowling or eating out,is $100.It costs $10 to bowl for the night,and it costs $20 for Quinn to eat at a restaurant.Quinn currently consumes four nights of bowling and three meals at a restaurant.If the price of bowling increased to $15,the income effect would predict:

Accepted Answer

A)   Quinn would consume more of each good.
B)   Quinn would consume less of each good.
C)   Quinn would consume more bowling and less meals out.
D)   Quinn would consume less bowling and more meals out.E) B) and C)
F) B) and D) B

Question 15

Betty is out on a first date with Barney.She decides to order the garden salad with dressing on the side in an effort to make a good first impression,even though she prefers leg of lamb.Economic theory:

Accepted Answer

A)   cannot explain why someone would choose a meal that brings her less utility than another.
B)   would suggest that making a good impression with her choice will bring her more utility than ordering lamb and making a bad impression.
C)   would suggest that she values what Barney thinks of her and will derive negative utility if she does not impress him.
D)   cannot be used to explain matters of the heart.E) A) and D)
F) None of the above

Question 16

Utility is:

Accepted Answer

A)   useful in comparing the relative satisfaction different consumers get from a particular good.
B)   useful in predicting when to put an item on sale.
C)   useful in quantitatively describing a person's preferences for one good over another.
D)   an interesting concept, but not really useful for anything.E) A) and D)
F) None of the above

Question 17

Assume Willow's income to spend on either earrings or hairbands is $24.If her budget constraint is pictured in the graph shown,which of the following must be true?

Accepted Answer

A)   Willow will buy more hairbands than earrings because they are less expensive.
B)   Willow will buy more earrings than hairbands because they are less expensive.
C)   Hairbands must cost $3, and earrings must cost $6.
D)   Hairbands must cost $8, and earrings must cost $4.E) B) and C)
F) None of the above

Question 18

Nick has $300 a month to spend on detailing his sports car or buying bottles of good wine.It costs $100 to have his car detailed and $50 for a bottle of wine.He currently buys four bottles of wine and has his car detailed once a month.If the price of detailing his car decreased to $75,Nick's budget constraint:

Accepted Answer

A)   would shift straight outward, because he is relatively wealthier.
B)   would rotate and change slope because relative prices have changed.
C)   would shift straight inward because he is relatively wealthier.
D)   One cannot determine what would happen without knowing Nick's marginal utility of each good.E) All of the above
F) A) and D)

Question 19

Assume the graph shown represents Dana's budget constraint.If Dana's income to spend on these two items decreased,which of the following could be said?

Accepted Answer

A)   Dana will buy more hairbands now because they are relatively less expensive.
B)   Dana will be able to buy less of both goods.
C)   Dana will derive more utility from each item, because she values each one more now that she's poorer.
D)   All of these are true.E) B) and C)
F) A) and C) B

Question 20

Individuals will make choices to maximize their:

Accepted Answer

A)   constraints.
B)   utility.
C)   income.
D)   values.E) B) and D)
F) B) and C)

Exam 7: Consumer Behavior

Grace has just eaten a slice of pizza and says it gave her a utility of 8.If she chooses to eat a second slice:

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

Correct Answer
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Linus has just watched two hours of TV.We can say:

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Courtney goes for an hour bike ride which yields a marginal utility of 8.She stops and gets an ice cream cone,and then rides her bike for another hour.We can say:

Correct Answer
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D

If the graph shown represents Taylor's budget constraint,which of the following consumption bundles could Taylor choose?

Correct Answer
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Utility measurements are:

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This table shows the different combinations of goods that Jack can consume,given that his income to spend on these two items is $10. Considering the information in the table shown,Jack's total utility from consuming bundle D would be:

Correct Answer
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According to revealed preference a consumer that chooses to smoke cigarettes:

Correct Answer
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The concept of marginal utility:

Correct Answer
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This graph shows three different budget constraints: A,B,and C. If Larry has budget constraint B in the graph shown,what is his opportunity cost of one gallon of milk?

Correct Answer
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You decide to buy your friend lunch after she helped you study for your exam.This is an example of the economic concept of:

Correct Answer
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Bobby makes a New Year's resolution to lose weight.On January 3^rd,he decides to go to Ben amp; Jerry's for ice cream instead of going to the gym.Using the concept of revealed preference,economists would most likely conclude that Bobby:

Correct Answer
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This graph shows three different budget constraints: A,B,and C. If Bart has budget constraint A in the graph shown,what would cause his budget constraint to shift to B?

Correct Answer
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B

Betty is out on a first date with Barney.She decides to order the garden salad with dressing on the side in an effort to make a good first impression,even though she prefers leg of lamb.Economic theory:

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Utility is:

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Assume Willow's income to spend on either earrings or hairbands is $24.If her budget constraint is pictured in the graph shown,which of the following must be true?

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Assume the graph shown represents Dana's budget constraint.If Dana's income to spend on these two items decreased,which of the following could be said?

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B

Individuals will make choices to maximize their:

Correct Answer
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Exam 7: Consumer Behavior

Grace has just eaten a slice of pizza and says it gave her a utility of 8.If she chooses to eat a second slice:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Linus has just watched two hours of TV.We can say:

Correct AnswerverifiedShow Answer

Courtney goes for an hour bike ride which yields a marginal utility of 8.She stops and gets an ice cream cone,and then rides her bike for another hour.We can say:

Correct AnswerverifiedD

If the graph shown represents Taylor's budget constraint,which of the following consumption bundles could Taylor choose?

Correct AnswerverifiedShow Answer

Utility measurements are:

Correct AnswerverifiedShow Answer

This table shows the different combinations of goods that Jack can consume,given that his income to spend on these two items is $10. Considering the information in the table shown,Jack's total utility from consuming bundle D would be:

Correct AnswerverifiedShow Answer

According to revealed preference a consumer that chooses to smoke cigarettes:

Correct AnswerverifiedShow Answer

The concept of marginal utility:

Correct AnswerverifiedShow Answer

This graph shows three different budget constraints: A,B,and C. If Larry has budget constraint B in the graph shown,what is his opportunity cost of one gallon of milk?

Correct AnswerverifiedShow Answer

You decide to buy your friend lunch after she helped you study for your exam.This is an example of the economic concept of:

Correct AnswerverifiedShow Answer

Bobby makes a New Year's resolution to lose weight.On January 3rd,he decides to go to Ben amp; Jerry's for ice cream instead of going to the gym.Using the concept of revealed preference,economists would most likely conclude that Bobby:

Correct AnswerverifiedShow Answer

This graph shows three different budget constraints: A,B,and C. If Bart has budget constraint A in the graph shown,what would cause his budget constraint to shift to B?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Betty is out on a first date with Barney.She decides to order the garden salad with dressing on the side in an effort to make a good first impression,even though she prefers leg of lamb.Economic theory:

Correct AnswerverifiedShow Answer

Utility is:

Correct AnswerverifiedShow Answer

Assume Willow's income to spend on either earrings or hairbands is $24.If her budget constraint is pictured in the graph shown,which of the following must be true?

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Correct AnswerverifiedShow Answer

Assume the graph shown represents Dana's budget constraint.If Dana's income to spend on these two items decreased,which of the following could be said?

Correct AnswerverifiedB

Individuals will make choices to maximize their:

Correct AnswerverifiedShow Answer

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D

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Bobby makes a New Year's resolution to lose weight.On January 3^rd,he decides to go to Ben amp; Jerry's for ice cream instead of going to the gym.Using the concept of revealed preference,economists would most likely conclude that Bobby:

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B

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B

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