Question 1

Veblen goods:

Accepted Answer

A)   are an excellent example of the individual nature of utility.
B)   are goods which consumers buy to show how wealthy they are.
C)   are goods that people buy more of when their income decreases.
D)   are inferior goods.E) C) and D)
F) A) and B)

Question 2

Alison is deciding how to spend the next hour.We ask her to rate the utility she would get from an hour of each activity.She would get utility of 4 from an hour of reading,utility of 2 from an hour of playing video games,and utility of 6 from jogging.Based on this information,economists could predict that Alison will:

Accepted Answer

A)   read.
B)   play video games.
C)   go jogging.
D)   do nothing, since none of the activities give her utility greater than 10.E) A) and D)
F) None of the above

Question 3

If successive units of a good are consumed,the marginal utility gained typically:

Accepted Answer

A)   increases at the same rate for all people.
B)   increases at different rates for different people.
C)   decreases at the same rate for all people.
D)   decreases at different rates for different people.E) None of the above
F) B) and D)

Question 4

Barbie is deciding whether to play soccer or go swimming over the next hour.She decides to swim.Economists would conclude that Barbie:

Accepted Answer

A)   is revealing a preference for swimming over soccer.
B)   will get less utility from swimming during the next hour than playing soccer.
C)   was unable to play soccer at that time.
D)   is more skilled at swimming than playing soccer.E) A) and B)
F) A) and C)

Question 5

Ethan enjoys buying books and going to the movies.He has income of $150 to spend on these two goods each month.The price of a book is $15 and the price of going to the movies is also $15.He currently consumes four books and six movies a month.If the price of a book increases to $20,then:

Accepted Answer

A)   the substitution and income effects would both predict Ethan would consume more of both goods.
B)   the substitution and income effects would both predict Ethan would consume less of both goods.
C)   the substitution effect would predict Ethan would consume more books and less movies, and the income effect would predict he would consume less of both.
D)   the substitution effect would predict Ethan would consume less books and more movies and the income effect would predict he would consume less of both.E) B) and D)
F) A) and C)

Question 6

In general,the substitution effect of an increase in the price of a normal good:

Accepted Answer

A)   will cause the individual to buy more of that good because they have relatively more income.
B)   will cause the individual to buy less of that good because they have relatively less income.
C)   will cause the individual to buy more of that good and less of others because it is relatively less expensive.
D)   will cause the individual to buy less of that good and more of others because it is relatively more expensive.E) All of the above
F) A) and B)

Question 7

Jeff and Roel like to eat pizza twice a week,burritos once a week,and steak four days a week.This variety of dinner choices illustrates the concept of:

Accepted Answer

A)   instable preferences..
B)   negative marginal utility.
C)   diminishing marginal utility.
D)   income maximization.E) None of the above
F) A) and B)

Question 8

You decide to forgo a third slice of pizza and have a scoop of ice cream instead.This is an example of the economic concept of:

Accepted Answer

A)   diminishing marginal utility.
B)   altruism.
C)   reciprocity.
D)   selfishness.E) A) and B)
F) B) and D)

Question 9

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,if Jack's income to spend on these two items were to increase to $16:

Accepted Answer

A)   he could afford to buy 16 popsicles and 8 ice cream cones.
B)   he could afford to buy either 16 popsicles or 8 ice cream cones.
C)   he could afford to buy 8 ice cream cones and 4 popsicles.
D)   None of these is true.E) C) and D)
F) A) and B)

Question 10

Thinking about the total utility gained from the consumption of a typical good,we can say in general that:

Accepted Answer

A)   total utility will rise, peak, and then decline as more and more units are consumed.
B)   consuming more and more units of a good will eventually cause marginal utility to increase
C)   total utility increases by decreasing amounts, until it is maximized. Then it declines.
D)   total utility is maximized where the marginal utility is greatest.E) A) and D)
F) None of the above

Question 11

A budget constraint:

Accepted Answer

A)   is the same across all individuals with the same income constraints.
B)   is different for each individual with the same income constraints.
C)   is the same across all individuals with the same tastes and preferences.
D)   is different for each individual with the same tastes and preferences.E) B) and D)
F) A) and B)

Question 12

If the graph shown represents Heather's budget constraint,and the price of hairbands were to decrease,the slope of Heather's budget constraint would become:

Accepted Answer

A)   flatter, reflecting the fact that hairbands are now relatively less expensive.
B)   steeper, reflecting the fact that hairbands are now relatively more expensive.
C)   flatter, reflecting the fact that earrings are now relatively less expensive.
D)   steeper, reflecting the fact that earrings are now relatively more expensive.E) B) and C)
F) A) and D)

Question 13

Elijah has just eaten his second popsicle.Using the concept of marginal utility,we can say:

Accepted Answer

A)   the utility he will gain from his third will reduce his total utility.
B)   the utility he will gain from his third will not reduce his total utility.
C)   the utility he will gain from his third will be less than that of his second but will increase his total utility.
D)   the utility he will gain from his third will be less than that of his second and may reduce his total utility.E) A) and D)
F) All of the above

Question 14

Katie just finished a bottle of Coke.Using the concept of marginal utility,we can say:

Accepted Answer

A)   the utility she will gain if she drinks another will reduce her total utility.
B)   the utility she will gain if she drinks another will increase her total utility.
C)   the utility she will gain if she drinks another will be the same as that of her first.
D)   the utility she will gain may or may not reduce her total utility.E) A) and B)
F) All of the above

Question 15

Max is shopping for a new winter jacket.The salesperson explains that two coats have identical features-the Columbia jacket that costs $120,and the Burton jacket that costs $300.Max buys the Burton jacket.Burton jackets may be a good example of:

Accepted Answer

A)   a normal good.
B)   an inferior good.
C)   a Veblen good.
D)   a Giffen good.E) A) and B)
F) B) and D)

Question 16

Bart is seen standing in front of the cooler that contains containers of iced tea and lemonade.Moments later,we see Bart drinking iced tea,and we conclude Bart is getting more utility from that drink than lemonade.We drew that conclusion based on what economic concept?

Accepted Answer

A)   Revealed preference
B)   Utility minimization
C)   Satisfaction scales
D)   Rational behaviorE) A) and C)
F) B) and D)

Question 17

Joe works for an environmental agency.Every day he chooses to fill his reusable water bottle and bring it to work instead of bringing in a plastic disposable water bottle each day.Joe most likely derives utility from:

Accepted Answer

A)   the taste of water from his reusable water bottle.
B)   the knowledge that he is doing something good for the environment by not using plastic water bottles.
C)   the knowledge that others in his firm observe his environmentally-friendly choice of water bottle.
D)   Joe likely derives utility from all three of these sources.E) C) and D)
F) B) and D)

Question 18

Assume the graph shown represents Kerri's budget constraint.If Kerri's income to spend on these two items increased,which of the following would be true?

Accepted Answer

A)   Kerri's budget constraint would shift out, maintaining the same slope.
B)   Kerri's budget constraint would shift out, and get steeper.
C)   Kerri's budget constraint would shift in, maintaining the same slope.
D)   Kerri's budget constraint would shift out, and get flatter.E) A) and D)
F) None of the above

Question 19

Revealed preference is:

Accepted Answer

A)   the idea that people's preferences can be determined by observing their choices and behavior.
B)   the notion that people reveal the utility they get by reporting it on a numerical scale.
C)   the method that psychologists, anthropologists, and economists use to measure utility.
D)   All of these are true.E) All of the above
F) A) and B)

Question 20

Zachary spends his day studying for a total of four hours and exercising for one hour.Using the concept of utility to explain his choices,we can say

Accepted Answer

A)   the total utility gained from exercising for one hour is greater than the total utility from studying for four hours.
B)   the marginal utility of exercising for the first hour was greater than the marginal utility of studying for the first hour.
C)   the marginal utility of studying for a fifth hour will be negative.
D)   the marginal utility from studying for a fifth hour is less than the marginal utility from the first hour of exercise.E) None of the above
F) A) and C)

Exam 7: Consumer Behavior

Joe works for an environmental agency.Every day he chooses to fill his reusable water bottle and bring it to work instead of bringing in a plastic disposable water bottle each day.Joe most likely derives utility from:

Correct Answer
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Thinking about the total utility gained from the consumption of a typical good,we can say in general that:

Correct Answer
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Assume the graph shown represents Kerri's budget constraint.If Kerri's income to spend on these two items increased,which of the following would be true?

Correct Answer
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In general,the substitution effect of an increase in the price of a normal good:

Correct Answer
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Elijah has just eaten his second popsicle.Using the concept of marginal utility,we can say:

Correct Answer
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You decide to forgo a third slice of pizza and have a scoop of ice cream instead.This is an example of the economic concept of:

Correct Answer
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Ethan enjoys buying books and going to the movies.He has income of $150 to spend on these two goods each month.The price of a book is $15 and the price of going to the movies is also $15.He currently consumes four books and six movies a month.If the price of a book increases to $20,then:

Correct Answer
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A budget constraint:

Correct Answer
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Revealed preference is:

Correct Answer
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If successive units of a good are consumed,the marginal utility gained typically:

Correct Answer
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Bart is seen standing in front of the cooler that contains containers of iced tea and lemonade.Moments later,we see Bart drinking iced tea,and we conclude Bart is getting more utility from that drink than lemonade.We drew that conclusion based on what economic concept?

Correct Answer
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Correct Answer
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Zachary spends his day studying for a total of four hours and exercising for one hour.Using the concept of utility to explain his choices,we can say

Correct Answer
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Jeff and Roel like to eat pizza twice a week,burritos once a week,and steak four days a week.This variety of dinner choices illustrates the concept of:

Correct Answer
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Veblen goods:

Correct Answer
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If the graph shown represents Heather's budget constraint,and the price of hairbands were to decrease,the slope of Heather's budget constraint would become:

Correct Answer
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Max is shopping for a new winter jacket.The salesperson explains that two coats have identical features-the Columbia jacket that costs $120,and the Burton jacket that costs $300.Max buys the Burton jacket.Burton jackets may be a good example of:

Correct Answer
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Barbie is deciding whether to play soccer or go swimming over the next hour.She decides to swim.Economists would conclude that Barbie:

Correct Answer
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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,if Jack's income to spend on these two items were to increase to $16:

Correct Answer
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Katie just finished a bottle of Coke.Using the concept of marginal utility,we can say:

Correct Answer
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Exam 7: Consumer Behavior

Joe works for an environmental agency.Every day he chooses to fill his reusable water bottle and bring it to work instead of bringing in a plastic disposable water bottle each day.Joe most likely derives utility from:

Correct AnswerverifiedShow Answer

Thinking about the total utility gained from the consumption of a typical good,we can say in general that:

Correct AnswerverifiedShow Answer

Assume the graph shown represents Kerri's budget constraint.If Kerri's income to spend on these two items increased,which of the following would be true?

Correct AnswerverifiedShow Answer

In general,the substitution effect of an increase in the price of a normal good:

Correct AnswerverifiedShow Answer

Elijah has just eaten his second popsicle.Using the concept of marginal utility,we can say:

Correct AnswerverifiedShow Answer

You decide to forgo a third slice of pizza and have a scoop of ice cream instead.This is an example of the economic concept of:

Correct AnswerverifiedShow Answer

Ethan enjoys buying books and going to the movies.He has income of $150 to spend on these two goods each month.The price of a book is $15 and the price of going to the movies is also $15.He currently consumes four books and six movies a month.If the price of a book increases to $20,then:

Correct AnswerverifiedShow Answer

A budget constraint:

Correct AnswerverifiedShow Answer

Revealed preference is:

Correct AnswerverifiedShow Answer

If successive units of a good are consumed,the marginal utility gained typically:

Correct AnswerverifiedShow Answer

Bart is seen standing in front of the cooler that contains containers of iced tea and lemonade.Moments later,we see Bart drinking iced tea,and we conclude Bart is getting more utility from that drink than lemonade.We drew that conclusion based on what economic concept?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Zachary spends his day studying for a total of four hours and exercising for one hour.Using the concept of utility to explain his choices,we can say

Correct AnswerverifiedShow Answer

Jeff and Roel like to eat pizza twice a week,burritos once a week,and steak four days a week.This variety of dinner choices illustrates the concept of:

Correct AnswerverifiedShow Answer

Veblen goods:

Correct AnswerverifiedShow Answer

If the graph shown represents Heather's budget constraint,and the price of hairbands were to decrease,the slope of Heather's budget constraint would become:

Correct AnswerverifiedShow Answer

Max is shopping for a new winter jacket.The salesperson explains that two coats have identical features-the Columbia jacket that costs $120,and the Burton jacket that costs $300.Max buys the Burton jacket.Burton jackets may be a good example of:

Correct AnswerverifiedShow Answer

Barbie is deciding whether to play soccer or go swimming over the next hour.She decides to swim.Economists would conclude that Barbie:

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,if Jack's income to spend on these two items were to increase to $16:

Correct AnswerverifiedShow Answer

Katie just finished a bottle of Coke.Using the concept of marginal utility,we can say:

Correct AnswerverifiedShow Answer

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