Answer to Question #17024 in Microeconomics for jaw

Question

1-Which is a dimension or assumption of the marginal-utility theory of consumer behavior?

a-The consumer has a budget constraint.
b-The consumer operates in irrational ways
c-The consumer experiences increasing marginal utility
d-The consumer obtains goods and services at a discount


2-Mohamed purchases two products, mineral water and popcorn. The marginal utility of mineral water is 60 and the marginal utility of popcorn is 30. The price of a bottle of mineral water is $2.00 and the price of a box of popcorn is $1.00. The utility-maximizing rule suggests that Mohamed should:

a-increase consumption of popcorn and decrease consumption of mineral water.
b-increase consumption of popcorn and increase consumption of mineral water.
c-decrease consumption of popcorn and increase consumption of mineral water.
d-make no change in the consumption of mineral water or popcorn.

3- According to the law of diminishing marginal utility, the marginal utility associated with consuming successive units of a good will:

a-increase as the amount consumed decreases.
b-remain constant as the amount consumed increases.
c-eventually decline as the amount consumed increases.
d-eventually increase as the amount consumed increases.


4-The downward slope of the demand curve for a product is the result of:

a-diminishing marginal utility.
b-diminishing marginal productivity.
c- increasing marginal cost.
d- the work-leisure preferences of workers.

5-Assume that a consumer purchases a combination of products A and B and that the MU(A)/P(A) = 150 and MU(B)/P(B) = 100. To maximize utility, without spending more money, the consumer should purchase:

a-less of A and more of B.
b- less of B and more of A.
c- more of both A and B.
d- less of both A and B.

6-The marginal utility of leisure time appears to:

a-be the same even for people with widely different incomes
b- be exempt from the law of diminishing marginal utility
c- increase as the quantity of available leisure time decreases
d- equal zero for successful business executives


7-The total utility derived from the consumption of diamonds tends to be:

a-low and the marginal utility tends to be low
b- high and the marginal utility tends to be high
c- low but the marginal utility tends to be high
d-high but the marginal utility tends to be low


8-Assume that product Alpha and product Beta are both priced at $1 per unit and that Salem has $20 to spend on Alpha and Beta. He 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- Salem should make no change in consumption.
b-given another dollar, Salem should buy an additional unit of Beta.
c- in order to maximize utility, Salem should buy more of Beta and less of Alpha.
d- in order to maximize utility, Salem should buy more of Alpha and less of Beta.

Answer 1

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