Combo with "Econ160: Ch.7 Utility Maximization" and 1 other – Flashcards

An indifference curve shows all:

Refer to the diagram where xy is the relevant budget line and I1, I2, and I3 are indifference curves. If the consumer is initially at point L, he or she should:

Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products J and K. Refer to the 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?

Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 5 and MUb/Pb = 8. Ben should purchase:

In drawing a particular budget line, money income and the prices of the two products are fixed.

A consumer is maximizing her utility with a particular money income when:

Frank is purchasing products C and D in utility-maximizing amounts. If the price of C is $4 and the price of D is $2, then:

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

If the price of A is $12 and the price of B is $3, the budget line tells us that a consumer in effect can trade:

Refer to the diagram. Total utility is at a maximum at _____ units of X.

(Last Word) Theft and burglary:

A product has utility if it:

Refer to the budget line shown in the diagram. Given the same money income, reductions in the prices of both products C and D will:

At each point on an indifference curve:

"Essential" water is cheaper than "nonessential" diamonds because:

Refer to the diagram where xy is the relevant budget line and I1, I2, and I3 are indifference curves. The equilibrium position for the consumer is at:

Refer to the diagram. The total utility yielded by 4 units of X is:

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:

The substitution effect suggests that when consumers judge product quality by price, they will substitute high-priced products for low-priced products

It is possible for a consumer's indifference curves to intersect.

Refer to the diagram in which the downsloping lines are budget lines and I1, I2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 2, and 5 are such that:

If the budget line shifts from BB to bb in the diagram, we can infer that the:

Susie buys two goods: rounds of golf and massages. Suppose that the price of a round of golf is $20 and the price of a massage is $30. In a typical week, Susie will play two rounds of golf, getting 20 units of satisfaction from the second round. She normally buys three massages each week, with the third giving her 30 units of satisfaction. If she were to buy a fourth massage in a week, it would give her 20 units of satisfaction. If the price of massages is reduced to $15, which of the following outcomes might we expect to occur?

Refer to the budget line shown in the diagram. The absolute value of the slope of the budget line is:

What do the income effect, the substitution effect, and diminishing marginal utility have in common?

Refer to the budget line shown in the diagram. If the consumer's money income is $20, the:

When a consumer shifts purchases from X to Y, the marginal utility of X falls and the marginal utility of Y rises.

An increase in the price of product A will:

Refer to the diagram. If the budget line shifts from ab to ac, the:

How did Apple overcome consumers' diminishing marginal utility for iPads?

Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4 respectively and that the consumer's income is $18. Refer to the data. What level of total utility does the rational consumer realize in equilibrium?

The theory of consumer behavior assumes that consumers attempt to maximize:

If the price of product X rises, then the resulting decline in the amount purchased will:

Which of the following has been a significant factor in the ability of iPads to compete effectively against laptop and desktop computers?

(Consider This) Unlike newspaper dispensing devices, soft drink dispensing machines do not permit people to take more than one can or bottle with each payment. The reason is that the:

A rational consumer will try to achieve the highest indifference curve that his or her income will allow.

The theory of consumer behavior assumes that:

The movement of the budget line from BB to bb in the figure suggests that income has:

Total utility may be determined by:

The diamond-water paradox arises because:

The shift of the budget line from cd to ab in the figure is consistent with:

(Consider This) Newspaper dispensing devices seemingly "trust" people to take only a single paper, but the devices actually rely on the law of:

Marginal utility is the:

Refer to the table and graph. Suppose that the price of X falls from $2 to $1, while the price of Y remains at $4. Which of the following represents the demand curve for X if the consumer has money income of $10 to spend on X and Y?

(Last Word) All of the following would reduce property crime by increasing its "price," except:

In introducing the opportunity cost of time into the theory of consumer behavior, we find that, all else equal:

Refer to the diagram in which the downsloping lines are budget lines and I1, I2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 3, and 5 are such that

In moving northeasterly from the origin, we encounter indifference curves that reflect higher and higher levels of total utility.

Utility refers to the:

Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2 respectively and that the consumer's income is $18. Refer to the data. What level of total utility will the utility-maximizing consumer realize?

Prashanth decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Prashanth:

The budget line shift from ab to cd in the figure is consistent with:

If you receive a gift whose market price is $20, but you consider it to be worth only $10, then:

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

Noncash gift-giving involves value loss when the marginal utility of the gift to the receiver is less than the product price.

An indifference map implies that:

A consumer's demand curve for a product is downsloping because:

The budget line shows:

Where total utility is at a maximum, marginal utility is:

Suppose Will Receives 150 utils from consuming one banana and 250 utils from consuming two bananas. What is the marginal utility of the 2nd banana?

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, and 150, respectively. The Marginal utility of the sixth wing is _____ utils?

The law of diminishing utility says that

Suppose you are consuming a particular good and you could somehow give back the last unit you consumed. What would happen to total marginal utility (assuming that the marginal utility of the unit given back is positive)?

Suppose you just finished your third plateful of Thanksgiving dinner and it yielded zero units of additional satisfaction. Should you go back for more?

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

Rich has $100,000 and Poore has $1,000. Which of these statements is most strongly supported by the theory of consumer choice?

We would expect the total utility of diamonds to be ____ than the total utility of water.

We would expect the marginal utility of diamonds to be _____ than the marginal utility of water.

Suppose you could quantify the amount of satisfaction you receive from consuming ice cream in money terms. You might say, "I expect to get $3 worth of satisfaction from this ice cream cone." According to traditional economic theory, if the price of this ice cream cone were $3.05 would you buy one?

If a person is receiving greater marginal utility per dollar from consuming one good than another it follows that he or she is

Ari is 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?

In order for an individual to be achieve consumer equilibrium through the consumption of two goods, A and B, that individual must fulfill the condition

In the Texas A study of "buying" behavior of two white rats, as the "relative price" of one beverage was raised,

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

If the marginal utility of a good is negative then

Given two goods, X and Y, their prices Px and Py, a consumer is in equilibrium when the last dollar spent on X yields

To economists utility means

The law of diminishing marginal utility

When an economist talks about utility, she is talking about

If the marginal utility of X is negative, then the last unit of X is

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 ____

There are two goods X and Y, and the absolute price of good Y falls. It follows that

If Smith gives up three units of Y to get one additional unit of X then

An indifference curve shows

The Marginal rate of substitution is illustrated by

The ______ one's income, the ____ one's budget constraint.

For economists framing refers to the

Given the choice between a sure thing option and a gamble option with the same expected pay off, a ______ person will choose the sure thing.

Implicit in the solution to the diamond water paradox is the idea that prices reflect ____ utility instead of ____ utility

As presented in the text research on neuroeconomics has shown that when individuals are presented with present-future choices the

Water's total utility is ____ but because water is so plentiful it's marginal utility is ____

Utility maximization is consistent with the