Question :
Table 10-4
Steak & Cheese
Steak & Cheese
: 1387695
Table 10-4
Steak & Cheese
Steak & Cheese
Grilled Chicken
Grilled Chicken
Quantity
MU
MU/P
MU
MU/P
1
40
10
30
15
2
32
8
24
12
3
20
5
16
8
4
12
3
12
6
5
6
1.5
8
4
6
2
0.5
4
2
72) Refer to Table 10-4. For steak and cheese and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis. Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches. Which of the following statements is false?
A) The price of steak and cheese sandwiches is $4. The price of grilled chicken sandwiches is $2.
B) If Mabel maximizes her utility, she will buy three grilled chicken sandwiches.
C) If Mabel maximizes her utility, she will buy two steak and cheese sandwiches.
D) We do not have enough information to determine how many sandwiches Mabel will buy to maximize her utility.
73) Refer to Table 10-4. For steak and cheese and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis. Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches. Which of the following statements is true?
A) If Mabel maximizes her utility she will buy three steak and cheese sandwiches and two grilled chicken sandwiches.
B) If Mabel was maximizing her utility when spending $14 and then received an additional $4, she would receive the most marginal utility per dollar if her next purchase was another grilled chicken sandwich.
C) Mabel will first buy two steak and cheese sandwiches; then with her remaining $6 she will buy three grilled chicken sandwiches.
D) To maximize her utility, Mabel will need a total of $36, the income needed to buy 6 steak and cheese sandwiches and 6 grilled chicken sandwiches.
74) The marginal utility per dollar that Harold Stratton receives from oranges is greater than the marginal utility per dollar Harold receives from pears. To maximize his utility, what should Harold do?
A) He should acquire more income so that he can afford to buy more oranges and pears.
B) He should reduce his consumption of both oranges and pears so that he can buy a greater variety of goods.
C) He should buy fewer pears and more oranges.
D) He should buy fewer oranges and more pears.
75) There are two conditions necessary for a consumer to maximize her utility. One is that the marginal utilities per dollar spent on each good and service consumed are equal. What is the other condition?
A) Total spending on all goods and services must equal the amount available to be spent.
B) The consumer must be satisfied with the choices she makes.
C) The total spent on each good and service is the same.
D) The prices of each good and service consumed must not be too high.
Table 10-5
Italian Sub
Italian Sub
Taco
Taco
Taco
Quantity
MU
MU/$4
MU
MU/$2
MU/$1
1
40
10
30
15
30
2
32
8
24
12
24
3
20
5
16
8
16
4
12
3
12
6
12
5
6
1.5
8
4
8
6
2
0.5
4
2
4
76) Refer to Table 10-5, which lists the values of Harry Taber’s marginal utility and marginal utility per dollar for Italian submarine (sub) sandwiches and tacos. Assume that the price of the sub sandwiches is $4 and the price of tacos is $2. When Harry’s income is $14 he buys two Italian sub sandwiches and three tacos. The last column lists the values of the marginal utility per dollar for tacos when the price of tacos decreases to $1. Complete this statement: As a result of the change in price,
A) Harry’s purchasing power has increased. He will reduce his consumption of tacos so he can buy one more sub. This is an example of the substitution effect of a price change.
B) Harry’s purchasing power has increased. If tacos are a normal good for Harry he will buy fewer tacos. This is an example of the income effect of a price change.
C) Harry’s purchasing power has increased. If tacos are a normal good for Harry he will buy more tacos. This is an example of the income effect of a price change.
D) Harry’s purchasing power has increased. Harry buys fewer tacos. This is an example of the substitution effect of a price change
77) Refer to Table 10-5, which lists the values of Harry Taber’s marginal utility and marginal utility per dollar for Italian submarine (sub) sandwiches and tacos. Assume that the price of the sub sandwiches is $4 and the price of tacos is $2. When Harry’s income is $14 he buys two Italian sub sandwiches and three tacos. The last column lists the values of the marginal utility per dollar for tacos when the price of tacos decreases to $1. Complete this statement: As a result of the change in price, the marginal utility of each taco Harry consumes increases and
A) the substitution effect of the price change will cause Harry to buy more tacos and fewer subs.
B) the substitution effect of the price change will cause Harry to buy more tacos if they are a normal good, and fewer tacos if they are an inferior good.
C) the substitution effect will cause Harry to buy another sub because his purchasing power has increased.
D) the substitution effect will cause Harry to buy fewer tacos.
78) Marge buys 5 CDs and 7 DVDs. The marginal utility of the 5th CD and the marginal utility of the 7th DVD are both equal to 30 utils. Can we say that this is the optimal combination of CDs and DVDs for Marge?
A) No. We need to know her preferences for CDs and DVDs.
B) Yes.
C) No. We need to know the prices of the CDs and DVDs.
D) No. If this was the optimal combination, the marginal utility per dollar of the 5th CD and the 7th DVD would be equal.
Table 10-6
Quantity of Burgers
Marginal Utility
Quantity of Pepsi
Marginal Utility
1
20
1
30
2
14
2
10
3
10
3
7
4
3
4
5
5
1
5
1
6
-5
6
0
7
-10
7
-4
Table 10-6 lists Jay’s marginal utilities for burgers and Pepsi. Jay has $7 to spend on these two goods. The price of a burger is $2 and the price of a can of Pepsi is $1.
79) Refer to Table 10-6. What is Jay’s optimal consumption bundle?
A) 1 burger and 2 Pepsis
B) 2 burgers and 3 Pepsis
C) 3 burgers and 1 Pepsi
D) 3 burgers and 2 Pepsis
80) Refer to Table 10-6. If Jay can eat all the burgers he wants for free, how many burgers will he consume?
A) 7 burgers
B) 6 burgers
C) 5 burgers
D) 3 burgers
81) Suppose Barry is maximizing his utility from consuming used paperback novels and audio books. The price of a used novel = $4 and the price of an audio book = $8. If the marginal utility of the last novel was 32 units of utility (utils) what was the marginal utility of the last audio book purchased?
A) 2 utils
B) 12 utils
C) 16 utils
D) 64 utils
