Question 1

is the satisfaction or pleasure one gets from consuming it

Accepted Answer

The utility of a good or service:

Question 2

positive, negative, or zero

Accepted Answer

Marginal utility can be:

Question 3

negative

Accepted Answer

Mary says, \"You would have to pay me $50 to attend that pro wrestling event.\" For Mary, the marginal utility of that event is:

Question 4

utility

Accepted Answer

The ability of a good or service to satisfy wants is called:

Question 5

satisfies consumer wants

Accepted Answer

A product has utility if it:

Question 6

beyond some point additional units of a product will yield less and less extra satisifacion to a consumer

Accepted Answer

The law of diminishing marginal utility states that:

Question 7

increase the marginal utility of the last unit consumed of this good

Accepted Answer

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

Question 8

change in total utility obtained by consuming one more unit of a good

Accepted Answer

Marginal utility is the:

Question 9

satisfaction that a consumer derives from a good or service

Accepted Answer

Utility refers to the:

Question 10

summing the marginal utilities of each unit consumed

Accepted Answer

Total utility may be detrmined by:

Question 11

is positive, but may be either increasing or decreasing

Accepted Answer

If total utility is increasing, marginal utility:

Question 12

zero

Accepted Answer

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

Question 13

demand curves slope downward

Accepted Answer

The law of diminishing marginal utility explains why:

Question 14

Alex may have to lower the price to convince Kara to buy a second slice

Accepted Answer

While eating at Alex\'s \"Pizza by the slice\" restaurant., Kara experiences diminishing marginal utility. She gained 10 units of satisfaction from her first slice pizza consumed, and would only recieve 5 units of satisfaction from consuing a second slice. Based on this information we can conclude that:

Question 15

consumers behave rationally, attempting to maximize their satisfaction

Accepted Answer

The theory of consumer behavior assumes that:

Question 16

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

Accepted Answer

To maximize utility a consumer should allocate money income so that the:

Question 17

more of X and less of Y

Accepted Answer

Suppose that MUx/Px exceeds MUy/Py. To maximize utility the consumer who is spending all her money income should buy:

Question 18

more of B and less of A

Accepted Answer

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:

Question 19

their marginal utilities are the same

Accepted Answer

Suppose you have a limited money income and you are purchasing products 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:

Question 20

MUa/Pa = MUb/Pb = MUc/Pc ... = MUn/Pn

Accepted Answer

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

Question 21

should buy less B and more A

Accepted Answer

Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $2 and $4 respectively. The marginal utility of hte last units of A and B are 16 and 24 respectively. These data suggest that Ms. Thomson:

Question 22

the marginal utility of the last dollar spent on each good purchased will be the same

Accepted Answer

If a rational consumer is in equilibrium, which of the following conditions will hold true?

Question 23

ratios of the marginal utility of each product purchased divided by its price are equal

Accepted Answer

A consumer who has a limited budget will maximize utility or satisfaction when the:

Question 24

decrease the marginal utility per dollar spend on A

Accepted Answer

An increase in the price of product A will:

Question 25

total utility

Accepted Answer

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

Question 26

X rises and the marginal utility of Y falls

Accepted Answer

When a consumer shifts purchases from product X to product Y the marginal utility of:

Question 27

has a higher \"marginal utility to price ratio\" for the hockey game than for the play

Accepted Answer

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

Question 28

demand curves are downsloping

Accepted Answer

Diminishing marginal utility explains why:

Question 29

they all help explain the downsloping demand curve

Accepted Answer

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

Question 30

marginal utility diminishes as more of a product is consumed

Accepted Answer

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

Question 31

one should consume less of time-intensive goods

Accepted Answer

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

Question 32

Apple introduced new features to entice previous buyers to purchase new models

Accepted Answer

How did Apple overcome consumers\' diminishing marginal utility for iPods?

Question 33

essential goods may be cheap while nonessential goods may be expensive

Accepted Answer

The diamond-water paradox arises because:

Question 34

the price of a product is related to its marginal utility, not its total utility

Accepted Answer

The diamond-water paradox occurs because:

Question 35

the supply of water is great relative to demand and the supply of diamonds is small relative to demand

Accepted Answer

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

Question 36

increases the amount of health care consumed by reducing the price of additional units of care

Accepted Answer

The fact that most medical purchases are financed through insurance:

Question 37

once the all-you-can-eat meal is purchased, consumers view additional trips back to the buffet as having a price of zero

Accepted Answer

who do people tend to eat more at all-you-can-eat buffet restaurants than at restaurants where each item is purchased separately?

Question 38

noncash transfers are less efficient than cash transfers

Accepted Answer

Most economists contend that:

Question 39

reduce recipient utility to a cash gift because noncash gifts often fail to match recipient preferences

Accepted Answer

Noncash gifts:

Question 40

there is a $10 or 50% value loss

Accepted Answer

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

Question 41

increase the efficiency of gift-giving because they allow the recipient to consume goods

Accepted Answer

According to economists, gift registries, returning gifts for cash refunds, and \"recycling gifts.\"

Question 42

each successive unit of loss hurts, but less than the previous unit

Accepted Answer

According to behavioral economics:

Question 43

the positive utility Laua received from seeing her portfoli value rise was less than the disutility she felt when its value declined

Accepted Answer

Last month Laura saw the value of her stock portfolio rise by $20,000. this month, she saw the value of her portfolio decline by $20,000. According to behavioral economics:

Question 44

Firms will reduce package sizes, but keep prices the same, thus increasing the per unit price of the good

Accepted Answer

According to prospect theory, what strategy will firms typically employ with regard to pricing and packaging their goods, when faced with rising production costs

Question 45

consumers feels the loss of a price increase more than they feel the loss of buying a smaller package for their money

Accepted Answer

According to prospect theory, firms are more likely to shrink packages than raise prices because:

Question 46

whether a new situation is viewed as a gain or a loss depends on one\'s starting position

Accepted Answer

According to the concept of framing effects:

Question 47

it should advertise that the \"low fat\" sour cream has only \"half the fat\" of the regular sour cream

Accepted Answer

Suppose that dairy barn foods produces a regular sour cream with 10 grams of fat per serving, and a \"low fat\" sour cream with only 5 grams of fat per serving (assume that this still considered a lot of fat to consume per serving). According to prospect theory, how should Dairy Barn promote its \"low fat\" sour cream.

Question 48

Josh\'s satisfaction with that salary depends on how much he made in the past

Accepted Answer

Josh will recieve a salary of $300,000 next year. According to prospect theory:

Question 49

Credit card companies want to increase profits by promoting slower repayment, and actual customer payments will be anchored by the smaller payment requirements

Accepted Answer

Who do credit card companies typically require small minimum payment amounts on their customers\' monthly credit card statements?

Question 50

Can influence decision-making with irrelevant information

Accepted Answer

Anchoring:

Question 51

people isolate purchases and sometimes make irrational decisions

Accepted Answer

Because of \"mental accounting\"

Question 52

mental accounting

Accepted Answer

The process by which people isolate purchases and fail to consider all consumption options simultaneously is known as

Question 53

people assign higher values to things they own than things they don\'t

Accepted Answer

According to the \"endowment effect:\"

Question 54

diminishing marginal utility

Accepted Answer

Newspaper dispensing devices seemingly \"trust\" people to take only a single paper but the devices actually rely on the law of:

Question 55

marginal utility of extra soft drink cans or bottles declines slowly, particularly because they are storable and can be consumed later

Accepted Answer

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:

Question 56

increasing our level of consumption doesn\'t make us any happier in the long term

Accepted Answer

The hedonic trendmill refers to a phenomenon where:

Question 57

enrollment in these programs was set as the default option and workers had to request to be unenrolled

Accepted Answer

participation in company retirement saving programs has increased dramatically because:

Question 58

subtle changes in policies or practices that result in large behavioral changes

Accepted Answer

\"Nudges\" refer to:

Question 59

all possible combinations of two goods that can be purchased, given money income and the prices of the goods

Accepted Answer

The budget line shows:

Question 60

the prices of both products and money income are assumed to be constant

Accepted Answer

In moving along a given budget line:

Question 61

budget line to the left

Accepted Answer

Increases in product prices shift the consume\'s:

Question 62

the price of one good relative to the other

Accepted Answer

A change in the slope of a budget line is solely the result of a change in:

Question 63

is unattainable, given the consumer\'s income

Accepted Answer

Any combination of goods lying outside of the budget line

Question 64

may shift either to the right or the left, or not at all

Accepted Answer

if money income increases and the prices of products A and B both increase, then the budget line:

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