Question 9 Rational consumer behaviour is where a person consumes the amount of a good that maximises the total utility from the good. maximises the consumer surplus from the good. minimises the amount spent on the good to achieve a given level of utility. maximises the marginal utility from the good

Question 9 Rational consumer behaviour is where a person consumes the amount of a good that maximises the total utility from the good. maximises the consumer surplus from the good. minimises the amount spent on the good to achieve a given level of utility. maximises the marginal utility from the good

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 23SQ

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Question 26 Any combination of goods lying outside of the budget line: implies that the consumer is not spending all his income. yields less utility than any point on the budget line. is unobtainable, given the consumer's income. yields less utility than any point inside the budget line.
Question 6 A consumer spends all of her income on two goods, coffee and doughnuts. She buys coffee at 25 cents per unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchased at 75 cents a unit with a total utility of 200 and a marginal utility of 24. To increase her total utility, the consumer should: Buy more coffee and less doughnuts Buy more of both goods Do nothing. She is currently maximizing utility with her limited budget. Buy less of both goods Buy more doughnuts and less coffee.
A consumer can maximize utility relative to their budget if they consume where Question 22 options: they spend the least money possible. marginal utility has fallen to zero. they buy an equal number of all goods. marginal utility per dollar for all goods are equal.
A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.
44) A person is in equilibrium when marginal utility per dollar equals 1. False True 45) The budget line for large-ticket items will be affected by the prices of the two items, the income level, and the interest rates for borrowers. True False 46) Which statement is NOT a critique of utility theory? Not all decisions are made rationally. Utility is not measurable. Utility theory is limited to an analysis of individual demand behavior. People do not make mental calculations of satisfaction.
Question 4 With the prices of commodities A, B and C equal, which of the following should a consumer do to maximize her utility? Regard these commodities as providing equal satisfaction value Buy these commodities in the quantities needed to make their marginal utilities equal. Buy quantities of each which make total utilities equal. Divide her budget equally among these commodities. None of the suggested options.
Question 18 An increase in the price of product A will: cause utility-maximizing consumers to buy more of A. decrease the marginal utility per dollar spent on A. not affect the marginal utility per dollar spent on A. increase the marginal utility per dollar spent on A.
In general, as a consumer consumes more of a good or service, total utility _____ and marginal utility _____. Question 39 options: a increases; increases b increases; decreases c decreases; increases d decreases; decreases
marginal utility is a measure of the benefit (or value, or enjoyment) a person obtains by a) Consuming a single additional unit of a product. b)Selling a single additional unit of a product (and spending the resulting cash). c) Borrowing the dollar value of a single additional unit of a product (and spending it on something nice). d)Converting a single additional unit of product to an equivalent number of units.
Question 11 Which one of the following statements is incorrect? Each point on a budget line stands for a different combination of 2 goods. All points on a budget line stand for the same level of satisfaction. The indifference curve is convex to the origin because of the law of diminishing marginal utility. Each point on an indifference curve represents a different combination of 2 goods All points on an indifference curve stand for the same level of satisfaction.
Suppose income increases. then Question 10 options: a) demand increases for all goods b) supply increases for all goods c) demand increases for normal goods and decreases for inferior goods d) all of the above depending upon the circumstance
Question 17 Marginal utility is the: sensitivity of consumer purchases of a good to changes in the price of that good. change in total utility obtained by consuming one more unit of a good. change in total utility obtained by consuming another unit of a good divided by the change in the price of that good. total utility associated with the consumption of a certain number of units of a good divided by the number of units consumed.