Even The Best Of Economists Can Not Beat This Quiz

30 Questions | Total Attempts: 359

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Even The Best Of Economists Can Not Beat This Quiz - Quiz

An economy is an area of the production, distribution and trade, as well as consumption of goods and services by different agents. In general, it is defined 'as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources'. Do you study Economy and think you know it all, try this quiz; but be careful because "Even The Best Of Economists Can Not Beat This Quiz"


Questions and Answers
  • 1. 
    a consumer is maximizing her utility with a particular money income when:    
    • A. 

      The total utility derived from each product consumed is the same.

    • B. 

      Mua/pa = mub/pb = muc/pc = ... = mun/pn.

    • C. 

      Mua = mub = muc = ... = mun.

    • D. 

      Pa = pb = pc = ... = pn.

  • 2. 
    assume that a consumer purchases products a, b, and c in quantities such that the last dollar spent on each yields the same marginal utility and the consumer's income is totally spent. we can conclude that:          
    • A. 

      Total utility is being minimized.

    • B. 

      Production costs are being minimized.

    • C. 

      Marginal utility exceeds total utility.

    • D. 

      Total utility is being maximized.

  • 3. 
    if a consumer is initially in equilibrium, an increase in money income will:  
    • A. 

      Move him to a new equilibrium on a lower indifference curve.

    • B. 

      Make his indifference curves steeper, but will not alter the equilibrium position.

    • C. 

      Have no effect on the equilibrium position because product prices have not changed.

    • D. 

      Move him to a new equilibrium on a higher indifference curve.

  • 4. 
    Assume a diagram in which a budget line is imposed on an indifference map. a consumer will maximize her utility:
    • A. 

      At any point where the budget line and an indifference curve intersect.

    • B. 

      At either point where the budget line intersects the horizontal and vertical axes.

    • C. 

      Where the budget line is tangent to an indifference curve.

    • D. 

      Where the ratio of the two product prices equals the reciprocal of the consumer's income.

  • 5. 
    Utility:
    • A. 

      Is synonymous with usefulness.

    • B. 

      Is want-satisfying power.

    • C. 

      Is easy to quantify.

    • D. 

      Rarely varies from person to person.

  • 6. 
    Marginal utility can be:
    • A. 

      Positive, but not negative.

    • B. 

      Positive or negative, but not zero.

    • C. 

      Positive, negative, or zero.

    • D. 

      Decreasing, but not negative.

  • 7. 
    A product has utility if it:
    • A. 

      Takes more and more resources to produce successive units of it.

    • B. 

      Violates the law of demand.

    • C. 

      Satisfies consumer wants.

    • D. 

      Is useful

  • 8. 
    The law of diminishing marginal utility states that:
    • A. 

      Total utility is maximized when consumers obtain the same amount of utility per unit of each product consumed.

    • B. 

      Beyond some point additional units of a product will yield less and less extra satisfaction to a consumer.

    • C. 

      Price must be lowered to induce firms to supply more of a product.

    • D. 

      It will take larger and larger amounts of resources beyond some point to produce successive units of a product.

  • 9. 
    The first pepsi yields craig 18 units of utility and the second yields him an additional 12 units of utility. his total utility from three pepsis is 38 units of utility. the marginal utility of the third pepsi is:
    • A. 

      26 units of utility.

    • B. 

      6 units of utility.

    • C. 

      8 units of utility.

    • D. 

      38 units of utility.

  • 10. 
    If the price of product x rises, then the resulting decline in the amount purchased will:
    • A. 

      Necessarily increase the consumer's total utility from his total purchases.

    • B. 

      Increase the marginal utility of this good.

    • C. 

      Increase the total utility from purchases of this good.

    • D. 

      Reduce the marginal utility of this good.

  • 11. 
    Total utility may be determined by:
    • A. 

      Multiplying the marginal utility of the last unit consumed by the number of units consumed.

    • B. 

      Multiplying the marginal utility of the last unit consumed by the number of units consumed. summing the marginal utilities of each unit consumed.

    • C. 

      Multiplying the marginal utility of the last unit consumed by product price.

    • D. 

      Multiplying the marginal utility of the first unit consumed by the number of units consumed.

  • 12. 
    Where total utility is at a maximum, marginal utility is:
    • A. 

      Negative.

    • B. 

      Positive and increasing.

    • C. 

      Zero

    • D. 

      Positive but decreasing.

  • 13. 
    Marginal utility:
    • A. 

      Is equal to total utility divided by the number of units consumed.

    • B. 

      Is equal to total utility if the demand curve is linear.

    • C. 

      Increases as more of a product is consumed.

    • D. 

      Diminishes as more of a product is consumed.

  • 14. 
    Which of the following is correct?
    • A. 

      There is no firm mathematical relationship between marginal utility and total utility.

    • B. 

      Total utility is equal to the change in marginal utility from consuming an additional unit of a product.

    • C. 

      If marginal utility is diminishing and is a positive amount, total utility will increase.

    • D. 

      If marginal utility is diminishing, total utility must also be diminishing.

  • 15. 
    The theory of consumer behavior assumes that:
    • A. 

      Consumers behave rationally, maximizing their satisfactions.

    • B. 

      Consumers have unlimited money incomes.

    • C. 

      Consumers do not know how much marginal utility they obtain from successive units of various products.

    • D. 

      Marginal utility is constant.

  • 16. 
    To maximize utility a consumer should allocate money income so that the:
    • A. 

      Elasticity of demand on all products purchased is the same.

    • B. 

      Marginal utility obtained from the last dollar spent on each product is the same.

    • C. 

      Total utility derived from each product consumed is the same.

    • D. 

      Marginal utility of the last unit of each product consumed is the same.

  • 17. 
    Suppose that mux/px exceeds muy/py. to maximize utility the consumer who is spending all her money income should buy:
    • A. 

      Less of x only if its price rises.

    • B. 

      More of y only if its price rises.

    • C. 

      More of y and less of x.

    • D. 

      More of x and less of y.

  • 18. 
    Refer to the above data. if the consumer has a money income of $52 and the prices of j and k are $8 and $4 respectively, the consumer will maximize her utility by purchasing:
    • A. 

      2 units of j and 7 units of k.

    • B. 

      5 units of j and 5 units of k.

    • C. 

      4 units of j and 5 units of k

    • D. 

      6 units of j and 3 units of k.

  • 19. 
    Refer to the above data. what level of total utility is realized from the equilibrium combination of j and k, if the consumer has a money income of $52 and the prices of j and k are $8 and $4 respectively?
    • A. 

      156

    • B. 

      124

    • C. 

      276

    • D. 

      36

  • 20. 
    The marginal utility of the last unit of a consumed is 12 and the marginal utility of the last unit of b consumed is 8. what set of prices for a and b respectively would be consistent with consumer equilibrium?
    • A. 

      $4 and $6

    • B. 

      $6 and $4

    • C. 

      $8 and $12

    • D. 

      $16 and $9

  • 21. 
    Suppose you have a limited money income and you are purchasing products a and b whose prices happen to be the same. to maximize your utility you should purchase a and b in such amounts that:
    • A. 

      Their marginal utilities are the same.

    • B. 

      Their total utilities are the same.

    • C. 

      Their marginal and total utilities are proportionate.

    • D. 

      The income and substitution effects associated with each are equal.

  • 22. 
    Diminishing marginal utility explains why:
    • A. 

      The income effect exceeds the substitution effect.

    • B. 

      The substitution effect exceeds the income effect.

    • C. 

      Supply curves are upsloping.

    • D. 

      Demand curves are downsloping.

  • 23. 
    What do the income effect, the substitution effect, and diminishing marginal utility have in common? all are required to explain the utility-maximizing position of a consumer.   they are all empirically measurable.   they all help explain the upsloping supply curve. they all help explain the downsloping demand curve.
    • A. 

      they are all empirically measurable.

    • B. 

      They all help explain the upsloping supply curve.

    • C. 

      They all help explain the downsloping demand curve.

    • D. 

      All are required to explain the utility-maximizing position of a consumer.

  • 24. 
    the diamond-water paradox arises because: essential goods may be cheap while nonessential goods may be expensive. the marginal utility of certain products increases, rather than diminishes.   essential goods are always higher priced than nonessential goods.   we sometimes fail to use money as a standard of value.
    • A. 

      Essential goods may be cheap while nonessential goods may be expensive.

    • B. 

      The marginal utility of certain products increases, rather than diminishes.

    • C. 

      essential goods are always higher priced than nonessential goods.

    • D. 

      We sometimes fail to use money as a standard of value.

  • 25. 
    Which of the following statements is correct?
    • A. 

      Both cash and noncash gift-giving cause value losses.

    • B. 

      Neither cash nor noncash gift-giving cause value losses.

    • C. 

      Noncash gift-giving create a value loss, but cash gifts do not.

    • D. 

      Cash gifts creates a value loss, but noncash gifts do not.

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