Question : Table 7-2 Quantity of Soup (cups) Total Utility Quantity of Sandwiches : 1245220

 

 

Table 7-2

Quantity of Soup (cups)

Total Utility

Quantity of Sandwiches

Total Utility

1

40

1

  45

2

60

2

  75

3

72

3

102

4

82

4

120

5

88

5

135

6

90

6

145

 

Table 7-2 above shows Keira’s utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.

 

 

31) Refer to Table 7-2. What is Keira’s marginal utility per dollar spent on the third cup of soup?

A) 72 units of utility

B) 36 units of utility

C) 12 units of utility

D) 6 units of utility

 

32) Refer to Table 7-2. If Keira maximizes her utility, how many units of each good should she buy?

A) 1 cup of soup and 5 sandwiches

B) 3 cups of soup and 4 sandwiches

C) 6 cups of soup and 2 sandwiches

D) 4 cups of soup and 3.5 sandwiches

 

33) Refer to Table 7-2. Suppose Keira’s income increases from $18 to $23 but prices have not changed. What is her utility maximizing bundle now?

A) 6 cups of soup and 5 sandwiches

B) 4 cups of soup and 5 sandwiches

C) 5 cups of soup and 4 sandwiches

D) 5 cups of soup and 5 sandwiches

 

34) Refer to Table 7-2. Holding prices constant, when Keira’s income changed from $18 to $23, her utility maximizing bundle changed. Based on your answers to her optimal choices at the two income levels, what type of goods are soup and sandwiches?

A) Soup is an inferior good and sandwiches are a normal good.

B) Soup is a normal good and sandwiches are an inferior good.

C) Both soup and sandwiches are normal goods.

D) Both soup and sandwiches are inferior goods.

35) Refer to Table 7-2. Holding prices constant, when Keira’s income changed from $18 to $23, what happens to her total utility and to the marginal utilities of the last cup of soup and the last sandwich purchased?

A) Her total utility increases but the marginal utilities of the last cup of soup and the last sandwich consumed decrease.

B) Her total utility, the marginal utility of the last cup of soup consumed and the marginal utility of the last sandwich consumed, all increase.

C) Her total utility decreases but the marginal utilities of the last cup of soup and the last sandwich consumed increase.

D) Her total utility and the marginal utility of the last cup of soup consumed increase but marginal utility of the last sandwich consumed decreases.

E) Her total utility and the marginal utility of the last sandwich consumed increase but marginal utility of the last cup of soup consumed decreases.

 

36) Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocolate bar is 18 units of utility and the marginal utility from the fourth bag of almonds is also 18. Is Adhira maximizing her utility?

A) Yes, the marginal utility from the last unit of each good is equal.

B) No, she must buy 1 more chocolate bar to equate her quantities of the two goods.

C) No, she must buy cut back to 3 bags of almonds to equate her quantities of the two goods.

D) No, without information on her income and the prices of the two goods, we cannot answer the question.

 

37) Economists usually assume that people act in a rational, self-interested way. In explaining how consumers make choices this means that economists believe

A) consumers will always buy goods and services at the lowest possible prices.

B) consumers spend their incomes to order to accumulate the most goods and services.

C) consumers make choices that will leave them as satisfied as possible given their incomes, tastes and the prices of goods and services available to them.

D) consumers will spend their incomes and time on activities that benefit themselves as much as possible, without regard to the welfare of others.

38) The satisfaction a person receives from consuming goods and services is called

A) contentment.

B) psychic income.

C) wealth.

D) utility.

 

39) The economic model of consumer behavior predicts that

A) consumers will try to earn as much income as they can over their lifetimes.

B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy.

C) consumers will try to accumulate as many goods and services as they can before they die.

D) consumers divide their time between consumption and leisure activities in order to maximize social welfare.

 

40) An economist observes two consumers in a supermarket. One of the consumers buys a case of Coca-Cola and the other buys a case of Pepsi-Cola. Both colas sell for the same price and the ages and incomes of the consumers are also the same. Based on this information, how would the economist explain the consumers’ choices?

A) One of the consumers made the wrong choice, but it is impossible to say which one.

B) Both consumers should have considered buying other colas that had lower prices.

C) Both consumers should have purchased less than a case because they would be able to buy more later.

D) Apparently, the consumers had different tastes.