Econ Chapter 21

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1.       2.   When an economist talks about utility, she is talking about
A.
B.
C.
D.
E.
2.  Apples Oranges Units Total Utility Units Total Utility 0 0 0 0 1 15 1 22 2 28 2 41 3 39 3 58 4 48 4 73 5 55 5 85    79.   Refer to Exhibit 21-3. Linda spends $5 a week on apples and oranges. If the price of both goods is $1 per unit, what is Linda's total utility from consuming the optimal bundle of goods?
A.
B.
C.
D.
E.
3.  146.   Refer to Exhibit 21-8. A move of the budget constraint from 1 to 2 is caused by a
A.
B.
C.
D.
4.  125.   If the MU/P ratio for two goods is the same, then
A.
B.
C.
D.
E.
5.  Units of Oranges Marginal Utility of Oranges (utils) 1 20 2 16 3 13 4 11 5   8    65.   Refer to Exhibit 21-2. Total utility for the first two units is
A.
B.
C.
D.
E.
6.     70.   The law of diminishing marginal utility
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B.
C.
D.
E.
7.  Apples Oranges Units Total Utility Units Total Utility 0 0 0 0 1 15 1 22 2 28 2 41 3 39 3 58 4 48 4 73 5 55 5 85    78.   Refer to Exhibit 21-3. Linda spends $5 a week on apples and oranges. If the price of both goods is $1 per unit, how many apples and oranges, respectively, does she purchase per week if she wants to maximize her utility?
A.
B.
C.
D.
E.
8.     55.   Given two goods, X and Y, and their prices, PX and PY a consumer will maximize utility by allocating expenditures such that
A.
B.
C.
D.
E.
9.  100.   The MU/P ratio for good X is greater than the MU/P ratio for good Y. To achieve consumer equilibrium, the consumer reallocates dollars from the purchase of good Y to the purchase of good X. If the law of diminishing marginal utility holds, the marginal utility of good X __________ and the marginal utility of good Y __________.
A.
B.
C.
D.
E.
10.  140.   Refer to Exhibit 21-7. For graph (2), if the price of X is $60, what is the consumer's income?
A.
B.
C.
D.
E.
11.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 20 20 2 30 (A) 3 (B) 8 4 (C) 6 5 (D) 3 118.   Refer to Exhibit 21-5.  What value goes in blank (C)?
A.
B.
C.
D.
E.
12.  142.   Refer to Exhibit 21-7. For graph (1), if the price of X is $20, the price of Y is
A.
B.
C.
D.
E.
13.  131.   Refer to Exhibit 21-6. I1, I2 and I3 are indifference curves and line ab is the relevant budget constraint. If the consumer is initially at point R, he should
A.
B.
C.
D.
E.
14.  120.   Suppose that there are two cities that are alike in every way except that one city has significantly better weather than the other city.  Call the city with good weather Good-Weather City (GWC) and the other Bad-Weather City (BWC).  Assume that the median price of a home in the two cities is originally the same.  If the marginal utility of living in GWC is 500 and the marginal utility of living in BWC is 300, to make themselves better off economic theory tells us that
A.
B.
C.
D.
15.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 20 20 2 30 (A) 3 (B) 8 4 (C) 6 5 (D) 3
A.
B.
C.
D.
E.
16.  Units of Oranges Marginal Utility of Oranges (utils) 1 20 2 16 3 13 4 11 5   8    67.   Refer to Exhibit 21-2. Total utility for the first four units is
A.
B.
C.
D.
E.
17.  Units of Oranges Marginal Utility of Oranges (utils) 1 20 2 16 3 13 4 11 5   8    66.   Refer to Exhibit 21-2. Total utility for the first three units is
A.
B.
C.
D.
E.
18.     30.   Because there are so few diamonds in the world, the consumption of diamonds
A.
B.
C.
D.
19.  Units of Plums Total Utility of Plums (utils) 1 22 2 34 3 44 4 52 5 57    61.   Refer to Exhibit 21-1. The marginal utility of the third plum is
A.
B.
C.
D.
E.
20.  115.   The marginal utility curve for units 1 through 5 of good Z lies above the horizontal axis.  What does this imply must be true about the total utility curve for units 1 through 5 of good Z?
A.
B.
C.
D.
21.     95.   If, as a person consumes additional units of a good, total utility rises by a constant amount, it follows that
A.
B.
C.
D.
E.
22.  Units of Plums Total Utility of Plums (utils) 1 22 2 34 3 44 4 52 5 57    64.   Refer to Exhibit 21-1. In this example, marginal utility
A.
B.
C.
D.
23.  147.   Refer to Exhibit 21-8. A move of the budget constraint from 2 to 3 is caused by a
A.
B.
C.
D.
24.     60.   Marginal utility is
A.
B.
C.
D.
E.
25.      144.    Refer to Exhibit 21-8. If the price of good X falls, the budget constraint moves from budget constraint
A.
B.
C.
D.
26.     10.   Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 80, 116, 136, 150, respectively. The marginal utility of the sixth wing is __________ utils.
A.
B.
C.
D.
27.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 20 20 2 30 (A) 3 (B) 8 4 (C) 6 5 (D) 3 117.   Refer to Exhibit 21-5.  What value goes in blank (B)?
A.
B.
C.
D.
E.
28.  143.   Refer to Exhibit 21-7. The relative price of X in terms of Y is the greatest on graph
A.
B.
C.
D.
29.       4.   Total utility is defined as the
A.
B.
C.
D.
E.
30.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 40 40 2 (A) 35 3 (B) 20 4 100 (C) 5 (D) 2 113.   Refer to Exhibit 21-4.  What value goes in blank (D)?
A.
B.
C.
D.
E.
31.  130.   Refer to Exhibit 21-6. I1, I2 and I3 are indifference curves and line ab is the relevant budget constraint. The equilibrium position for the consumer is at
A.
B.
C.
D.
E.
32.       3.   A util is an artificial construct used as a means of measuring the
A.
B.
C.
D.
33.     50.   According to the traditional theory of marginal utility as presented in the textbook, as more units of a good are acquired, the consumer's marginal utility
A.
B.
C.
D.
E.
34.  Units of Plums Total Utility of Plums (utils) 1 22 2 34 3 44 4 52 5 57    62.   Refer to Exhibit 21-1. The marginal utility of the second plum is
A.
B.
C.
D.
35.       1.   The diamond-water paradox is the observation that
A.
B.
C.
D.
36.     90.   Smith, who has $10,000, receives an extra dollar, as does Jones, who has $100,000. Smith receives more utility from the extra dollar than does Jones. This is an example of
A.
B.
C.
D.
37.     20.   You and your roommate are eating pizza and have already consumed all but the last slice. Your roommate claims that he is hungrier than you and therefore should get the last slice of pizza. Your roommate has made
A.
B.
C.
D.
38.  Units of Plums Total Utility of Plums (utils) 1 22 2 34 3 44 4 52 5 57    63.   Refer to Exhibit 21-1. The marginal utility of the fourth plum is
A.
B.
C.
D.
E.
39.  138.   Refer to Exhibit 21-7. Which of the following graphs represents a budget constraint of a consumer whose income is $120?
A.
B.
C.
D.
E.
40.     25.   Which of the following statements is true?
A.
B.
C.
D.
41.  Units of Oranges Marginal Utility of Oranges (utils) 1 20 2 16 3 13 4 11 5   8    68.   Refer to Exhibit 21-2. Total utility for all five units is
A.
B.
C.
D.
E.
42.  145.   Refer to Exhibit 21-8. If the price of good X rises, the budget constraint moves from budget constraint
A.
B.
C.
D.
E.
43.  135.   If a person's income falls, his or her budget constraint moves
A.
B.
C.
D.
E.
44.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 40 40 2 (A) 35 3 (B) 20 4 100 (C) 5 (D) 2 112.   Refer to Exhibit 21-4.  What value goes in blank (C)?
A.
B.
C.
D.
E.
45.  148.   Research conducted by Nicholas Epley and his colleagues at Harvard showed that people will spend a _________________ percentage of money given to them if it is  ________________ rather than
A.
B.
C.
D.
46.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 40 40 2 (A) 35 3 (B) 20 4 100 (C) 5 (D) 2 110.   Refer to Exhibit 21-4.  What value goes in blank (A)?
A.
B.
C.
D.
E.
47.       5.   Marginal utility is defined as the
A.
B.
C.
D.
E.
48.     35.   Ari is currently consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers cost $2.50, is Ari consuming the correct quantities of these two goods to be in consumer equilibrium?
A.
B.
C.
D.
49.     15.   Which of the following is true?
A.
B.
C.
D.
50.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 20 20 2 30 (A) 3 (B) 8 4 (C) 6 5 (D) 3 119.   Refer to Exhibit 21-5.  What value goes in blank (D)?
A.
B.
C.
D.
E.
51.     85.   Smith says she gets 5 utils from consuming the fifth unit of a good whereas Jones says he gets 10 utils from consuming the fifth unit of a good. It follows that
A.
B.
C.
D.
E.
52.     45.   Diamonds are more expensive than water because
A.
B.
C.
D.
E.
53.  Apples Oranges Units Total Utility Units Total Utility 0 0 0 0 1 15 1 22 2 28 2 41 3 39 3 58 4 48 4 73 5 55 5 85    80.   Refer to Exhibit 21-3. Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of
A.
B.
C.
D.
54.     40.   In the Texas A & M study of the "buying" behavior of two white rats, as the "relative price" of one beverage was raised,
A.
B.
C.
D.
E.
55.  105.   The MU/P ratio for good X is the same as for good Y: 12 utils per dollar. If the price of good X rises to $2 from $1, a consumer who seeks (consumer) equilibrium will buy more of good __________ until the marginal utility of good __________ falls to __________ utils.
A.
B.
C.
D.
56.  132.   Refer to Exhibit 21-6. I1, I2 and I3 are indifference curves and line ab is the relevant budget constraint. Point N is
A.
B.
C.
D.
57.     75.   Which of the following is inconsistent with the proposition that gambling in a fair game is not worth it?
A.
B.
C.
D.
58.  Units of Good Consumed Total Utility (utils) Marginal Utility (utils) 1 40 40 2 (A) 35 3 (B) 20 4 100 (C) 5 (D) 2 111.   Refer to Exhibit 21-4.  What value goes in blank (B)?
A.
B.
C.
D.
E.
59.  141.   Refer to Exhibit 21-7. For graph (3), if the price of Y is $200, the price of X is
A.
B.
C.
D.
E.
60.  139.   Refer to Exhibit 21-7. The price of X is $40 and the price of Y is $80. Assuming that the consumer allocates all of his income to good X, how many units of X will he purchase? (Request: Do not ask the instructor to which graph the question is referring.)
A.
B.
C.
D.
E.
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