Chapter 6: Consumer Choice Theory (Multiple Choice)

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Chapter 6: Consumer Choice Theory (Multiple Choice)
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2014-03-18 22:40:57
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Microeconomics Consumer choice theory
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Chapter 6: Consumer Choice Theory (Multiple Choice)
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    • author "Patrick Rosenauer"
    • tags ""
    • folders "Microeconomics"
    • description ""
    • fileName "Chapter 6: Consumer Choice Theory (Multiple Choice)"
    • Utility is most closely defined by which of the following terms?
    • A. Useful.
    • B. Worthiness.
    • C. Necessary.
    • D. Satisfaction.
    • D. Satisfaction.
  1. A util represents a unit of measurement for the:
    A. Way a producer will respond to change in price.
    B. Way a consumer will respond to change in price.
    C. Happiness a person obtains form consuming a good.
    D. Profit a firm makes from producing a good.
    E. Dollars a consumer spends on a good.
    C. Happiness a person obtains form consuming a good.
    (this multiple choice question has been scrambled)
  2. Utility refers to the:
    A. Relationship of demand to the supply of a product.
    B. Ability of a good or service to have value in the marketplace.
    C. Satisfaction a consumer experiences after a good or service is purchased.
    D. Usefulness of the product consumed.
    E. Satisfaction a consumer expects to recive from a good or service.
    E. Satisfaction a consumer expects to recive from a good or service.
    (this multiple choice question has been scrambled)
  3. Consumers tend to maximize:
    A. Marginal utility.
    B. Money holdings.
    C. Marginal utility per dollar.
    D. Consumer surplus.
    E. Total utility.
    D. Consumer surplus.
    (this multiple choice question has been scrambled)
  4. Marginal utility (MU) equals:
    A. PQ/TU.
    B. P/Q.
    C. TU/Q.
    D. TU/P.
    E. Q/TU.
    C. TU/Q.
    (this multiple choice question has been scrambled)
  5. Marginal utility is the cange in:
    A. Average utility when an extra unity of output is consumed.
    B. Total utility when an extra unity of output is consumed.
    C. Marginal utility when an extra unity of output is produced.
    D. Total utility when an extra unit of output is produced.
    E. Marginal utility when an extra unit of output is consumed.
    B. Total utility when an extra unity of output is consumed.
    (this multiple choice question has been scrambled)
  6. Utility theory assumes that marginal utility:
    A. Increases as an individual consumes more of a product.
    B. Decreases as an individual consumes more of a product.
    C. Is zero as long as the individual derives utility form the product.
    D. Is constant as long as the individual derives utility from the product.
    E. Is constant as long as the individual derives satisfaction from the product.
    B. Decreases as an individual consumes more of a product.
    (this multiple choice question has been scrambled)
  7. If total utility is falling, marginal utility is:
    A. Negative.
    B. Positive.
    C. Zero.
    D. Positive, but declining.
    E. Either positive or negative.
    A. Negative.
    (this multiple choice question has been scrambled)
  8. Marginal utility is defined as:
    A. The extra satisfaction the consumer receives form an extra $1 of income.
    B. A comparison of the utility a good provides with the price of that good.
    C. The extra satisfaction a person derives from consuming an additional unity of a good.
    D. The total level of satisfaction a consumer receives upon the consuption of a certain number of goods.
    E. The number of hours a consumer would be willing to work to receive a certin product.
    C. The extra satisfaction a person derives from consuming an additional unity of a good.
    (this multiple choice question has been scrambled)
  9. As consumption of a good increases, the extra satisfaction received from consuming an additional unit of the good decreases. This statement is known as the law of:
    A. Diminishing marginal returns.
    B. Total utility.
    C. Demand.
    D. Increasing costs.
    E. Diminishing marginal utility.
    E. Diminishing marginal utility.
    (this multiple choice question has been scrambled)
  10. If the price of a product rises, consumers buy less of the good because the:
    A. MU/P of the good falls below the MU/P of other goods.
    B. MU/P of the good rises above the MU/P of other goods.
    C. Marginal utility of the good diminishes.
    D. Total utility of the good diminishes.
    E. Marginal utility of the good rises.
    A. MU/P of the good falls below the MU/P of other goods.
  11. According to the law of diminishing marginal utility, the marginal utility curve is _______.
    A. vertical flat.
    B. upward slopint.
    C. flat.
    D. downward sloping.
    D. downward sloping.
    (this multiple choice question has been scrambled)
  12. Consumers should continue to rearrange their consumption of two goods until:
    A. The same amount of each is purchased.
    B. The marginal utility per dollar's worth of the two goods is the same for the last dollar spent on each good.
    C. The prices of the two goods are equal for the last dollar spent on each good.
    D. Marginal utility is the same for each good for the last dollar spend on each good.
    D. Marginal utility is the same for each good for the last dollar spend on each good.
    (this multiple choice question has been scrambled)
  13. According to the utility model of consumer demand, the demand curve is downward-sloping because of the law of:
    A. Diminishing utility maximization.
    B. Diminishing consumer equilibrium.
    C. Consumer equilibrium.
    D. Diminishing marginal utility.
    D. Diminishing marginal utility.
    (this multiple choice question has been scrambled)
  14. Suppose a consumer wants to obtain the highest possible satisfaction from goods purchased on a fixed budget. Which of the following must be equal for all goods?
    A. Marginal utility per dollar.
    B. Marginal utility.
    C. Average utility.
    D. Total utility.
    A. Marginal utility per dollar.
    (this multiple choice question has been scrambled)
  15. If a good A has a marginal utility of 30 and a price of $5, and good B has a marginal utility of 10 and a price of $2, then:
    A. Goods A and B are of equal value to this consumer.
    B. Neither good A nor B is worth the money.
    C. Good A is a better buy than good B.
    D. Goods A and B should both be purchased.
    E. Good B is a better buy than good A.
    C. Good A is a better buy than good B.
    (this multiple choice question has been scrambled)
  16. If a consumer is spending all of his/her income in a manner where MUa/Pa = MUb/Pb, then the consumer:
    A. Should increase the consumption of both A and B.
    B. Is maximizing his/her utility.
    C. Should increase the consumption of B and decrease the consumption of A.
    D. Should increase the consumption of A and decrease the consumption of B.
    B. Is maximizing his/her utility.
    (this multiple choice question has been scrambled)
  17. If a consumer is spending all of his/her income in a manner where MUa/Pa is greater than MUb/Pb, then the consumer:
    A. Is maximizing his/her utility.
    B. Should increase the purchases of A and decrease the purchases of B.
    C. Should spend less money on both goods.
    D. Should spend more money on both goods.
    E. Shold increase his/her purchases of B and decrease the purchases of A.
    B. Should increase the purchases of A and decrease the purchases of B.
    (this multiple choice question has been scrambled)
  18. When the price of a good falls, consumers may increase the quantity consumed because they have greater total purchasing power. This statement describes the:
    A. Consumer equilibrium effect.
    B. Price effect.
    C. Substitution effect.
    D. Income effect.
    D. Income effect.
    (this multiple choice question has been scrambled)
  19. The income effect refers to a change in:
    A . Income because of changes in the CPI.
    B. The quantity demanded of a good because of a change in the buyer's real income.
    C. The quantity demanded of a good because of a change in the buyer's money income.
    D. None of the above.
    B. The quantity demanded of a good because of a change in the buyer's real income.
  20. When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the:
    A. Price effect.
    B. Income effect.
    C. Substitution effect.
    D. Consumer equilibrium effect.
    C. Substitution effect.
    (this multiple choice question has been scrambled)

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