Quiz 6 of ECON251 Purdue University In Tutorial Library

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TITLE: Quiz 6 of ECON251 Purdue University

UNIVERSITY / INSTITUTE: Purdue University

CLASS / COURSE: ECON 25100: Microeconomics

QUESTION DESCRIPTION:

Quiz 6 (Chapter 6)
 
1. The satisfaction or pleasure one gets from consuming a good or service is: 
 
A. Price  
 B. Utility    
C. Income  
D. Profits  
 
2. Which of the following defines marginal utility? 
 
A. The change in total utility divided by the price of a product  
B. The maximum amount of satisfaction from consuming a product  
C. The total satisfaction received from consuming as much of the product that is available for consumption  
 D. The additional satisfaction received from consuming one more unit of a product    
 
3. After eating four slices of pizza, you are offered a fifth slice. You turn down the slice. Your refusal indicates that the: 
 
A. Marginal utility for pizza slices is negative  
B. Total utility for pizza slices is negative  
 C. Marginal utility is positive for the fourth slice and negative for the fifth slice    
D. Total utility was positive for the fourth slice and negative for the fifth slice  
 
4. When diminishing marginal utility starts happening as a person consumes more and more of a given good: 
 
A. Total utility will diminish  
 B. Total utility will increase at a diminishing rate    
C. Marginal utility will become negative  
D. Total utility will become negative  
 
5. Which statement is correct? 
 
A. When marginal utility is decreasing, an increase in the quantity consumed will decrease total utility  
B. When marginal utility is positive, an increase in the quantity consumed will decrease total utility  
 C. When marginal utility is positive, an increase in the quantity consumed will increase total utility    
D. When marginal utility is zero, an increase in the quantity consumed will make total utility zero  
 
6. The downward slope of the demand curve for a product shows the implications of: 
 
 A. Diminishing marginal utility    
B. Diminishing marginal product  
C. Increasing opportunity cost  
D. Cost-benefit analysis  
 
7. In deciding what to buy, the consumer will choose the good with the: 
 
A. Highest marginal utility  
B. Lowest price  
 C. Highest marginal utility-to-price ratio    
D. Lowest marginal utility-to-price ratio  
 
8. A consumer makes purchases of an existing product X such that the marginal utility is 10 and the price is $5. The consumer also tries a new product Y and at the current level of consumption it has a marginal utility of 8 and a price of $1. The utility-maximizing rule suggests that this consumer should: 
 
A. Increase consumption of product X and decrease consumption of product Y  
B. Increase consumption of product X and increase consumption of product Y  
 C. Increase consumption of product Y and decrease consumption of product X    
D. Decrease consumption of product Y and decrease consumption of product X  
 
9. Assume that product Alpha and product Beta are both priced at $1 per unit and that Ellie has $20 to spend on Alpha and Beta. She buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40 and the marginal utility of Beta is 20. This indicates that: 
 
A. Ellie should make no change in consumption  
B. Given another dollar, Ellie should buy an additional unit of Beta  
C. In order to maximize utility, Ellie should buy more of Beta and less of Alpha  
 D. In order to maximize utility, Ellie should buy more of Alpha and less of Beta    
 
10. Assume that a consumer purchases a combination of products Y and Z and that the MUy/Py= 25 and MUz/Pz = 25. To maximize utility, without spending more money, the consumer should: 
 
A. Purchase less of Y and more of Z  
B. Purchase more of Y and less of Z  
C. Purchase more of both Y and Z  
 D. Make no change in Y and Z    
 
 
  

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SUBJECTS / CATEGORIES:
1. Business Economics
2. Economics
3. Microeconomics

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