Question :
61) Refer to Table 7-4. For steak and cheese and : 1245223
61) Refer to Table 7-4. 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.
62) 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.
63) 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.
64) 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 7-5
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 7-5 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.
65) Refer to Table 7-5. 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
66) Refer to Table 7-5. 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
67) 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
68) Terence has $50 per week to spend on Subway sandwiches and milkshakes. The price of a Subway sandwich is $5 and the price of a milkshake is $4. He buys 6 sandwiches and 5 milkshakes. The marginal utility of the 6th sandwich = 25 and the marginal utility of the 5th milkshake = 24. Which of the following is true?
A) He is not maximizing his utility and should buy more milkshakes.
B) He is maximizing his utility.
C) He is not maximizing his utility and should buy more Subway sandwiches.
D) He is not maximizing his utility because he is not spending all of his income.
69) Suppose Renee can increase her total utility from consuming video rentals and books by buying one more book and renting one fewer video. Which of the following is true?
A) The marginal utility of video rentals is negative.
B) The marginal utility per dollar spent on books exceeds that of video rentals.
C) The marginal utility of the last book consumed exceeds the marginal utility of the last video rental consumed.
D) The marginal utility of the last video rental consumed exceeds the marginal utility of the last book consumed.
Table 7-6
Quantity of Beer (glasses)
Total Utility
Quantity of Pizza (slices)
Total Utility
1
25
1
20
2
45
2
35
3
60
3
45
4
65
4
50
5
69
5
52
6
70
6
52
Table 7-6 shows Antonio’s utility from beer and pizza.
70) Refer to Table 7-6. What is Antonio’s marginal utility from consuming the fifth beer?
A) 4 utils
B) 13.6 utils
C) 69 utils
D) 134 utils
