Quantity
(bananas)
Total
utility
0
0
1
35
2
60
3
80
4
100
5
115
6
127
7
137
8
145
32) Sam’s total utility for bananas is in the table above. Sam’s marginal utility from the fourth banana is
A) 100
B) 25
C) 20
D) 15
E) cannot be determined from the given information.
33) Sam’s total utility for bananas is in the table above. Sam’s total utility shows that the law of diminishing marginal utility
A) holds because his marginal utility from bananas decreases as Sam eats more bananas.
B) does not hold because Sam’s total utility does not reach its maximum.
C) does not hold because Sam’s marginal utility does not decrease to zero.
D) holds because Sam’s total utility from bananas increases as Sam eats more bananas.
E) None of the above answers is correct because there are no data for marginal utility with which to answer the question.
34) The table above gives Matt’s utility from consuming slices of pizza. As Matt consumes more slices of pizza, he
A) obtains greater amounts of marginal utility.
B) obtains less total utility.
C) has diminishing marginal utility.
D) has diminishing total utility.
E) has unchanging marginal utility.
35) For a consumer to maximize utility, in part the consumer must
A) allocate the entire available budget.
B) make the marginal utility per dollar from each good as much different as possible for all goods.
C) make the marginal utility per dollar from each good as small as possible for all goods.
D) spend as little of the budget as possible.
E) Answers A and B are both correct.
36) In order to maximize his or her utility, a consumer must allocate his or her entire budget and
A) buy the combination of goods that makes the marginal utility per dollar from all goods as small as possible.
B) buy the combination of goods that equalizes the total utility per dollar from all goods.
C) do nothing else because when the entire budget is allocated, utility is maximized.
D) buy the combination of goods that equalizes the marginal utility per dollar from all goods.
E) buy the combination of goods that makes the marginal utility per dollar from all goods as large as possible.
37) The utility-maximizing rule says that consumers must
A) only allocate the entire available budget.
B) only make the marginal utility per dollar the same for all goods.
C) allocate the entire available budget and make the marginal utility per dollar the same for all goods.
D) either allocate the entire available budget or make the marginal utility per dollar the same for all goods but not both.
E) None of the above answers are correct.
38) Suppose the consumer has allocated his or her entire budget. Which of the following conditions is also required for total utility to be maximized?
A) Marginal utility has decreased to zero for all goods.
B) The least inexpensive combination of goods has been purchased.
C) The marginal utility for each good is equal.
D) The marginal utility divided by price for each good is equal.
E) The number of units of each good consumed must be the same.
39) Carter spends his entire budget on pizza and Pepsi. He maximizes his utility when he allocates his entire available budget and buys pizza and Pepsi so that the
A) marginal utility from pizza is equal to the marginal utility from Pepsi.
B) total utility from both pizza and Pepsi is maximized.
C) marginal utility per dollar from pizza is equal to the marginal utility per dollar from Pepsi.
D) total utility per dollar from both pizza and Pepsi are equal.
E) None of the above answers is correct.
40) For David, the marginal utility from an additional car is 2,000 units and the marginal utility from an additional vacation is 1,000 units. David is allocating all his budget. Hence to maximize his utility, David will
A) shift his consumption from the vacation to the car.
B) shift his consumption from the car to the vacation.
C) save his budget by not spending it until he can afford both the car and the vacation.
D) buy both the car and the vacation now.
E) possibly do something, but there is not enough information available to determine what he would do.
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