Question : 7.1   Utility and Consumer Decision Making 1) Economists assume that the : 1267095

7.1   Utility and Consumer Decision Making

1) Economists assume that the goal of consumers is to

A) do as little work as possible to survive.

B) make themselves as well off as possible.

C) expend all their income.

D) consume as much as possible.

2) Utility is

A) easily measured in units called utils.

B) subjective and difficult to measure.

C) the consumption of a quasi-public good like electricity or natural gas.

D) the production of a quasi-public good like electricity or natural gas.

3) Marginal utility is the

A) total satisfaction received from consuming a given number of units of a product.

B) average satisfaction received from consuming a product.

C) extra satisfaction received from consuming one more unit of a product.

D) satisfaction achieved when a consumer has had enough of a product.

4) As a consumer consumes more and more of a product in a particular time period, eventually marginal utility

A) rises.

B) is constant.

C) declines.

D) fluctuates.

5) If a consumer receives 22 units of marginal utility for consuming the first can of soda, 20 units from consuming the second, and 15 from the third, the total utility of consuming the three units is

A) 57 utility units.

B) 35 utility units.

C) 15 utility units.

D) unknown as more information is needed to determine the answer.

6) If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the third candy bar is

A) 25 utility units.

B) 20 utility units.

C) 5 utility units.

D) unknown as more information is needed to determine the answer.

7) If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the second candy bar is

A) 25 utility units.

B) 20 utility units.

C) 5 utility units.

D) unknown as more information is needed to determine the answer.

8) Total utility

A) cannot decrease as a person consumes more and more of a good.

B) has a constant rate of increase as a person consumes more and more of a good.

C) is equal to the sum of the marginal utilities of all units consumed.

D) is negative when marginal utility is declining.

9) If, as a person consumes more and more of a good, each additional unit adds less satisfaction than the previous unit consumed, we are seeing the workings of

A) the law of demand.

B) the law of supply.

C) the law of increasing marginal opportunity cost.

D) the law of diminishing marginal utility.

10) The law of diminishing marginal utility states that

A) eventually total utility falls as more of a good is consumed, other things constant.

B) the extra satisfaction from consuming a good decreases as more of a good is consumed, other things constant.

C) the extra satisfaction from consuming a good increases slowly as more of a good is consumed, other things constant.

D) when the extra satisfaction from consuming a good becomes negative, total utility starts falling, other things constant.