Question : Table 7-2 Quantity of Soup (cups) Total Utility Quantity of Sandwiches : 1267112

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) If you received negative marginal utility from consuming the 4th slice of pizza, then your total utility from 4 slices of pizza must be less than your total utility from 3 slices of pizza.

38) When diminishing marginal utility sets in, total utility must be negative.

39) A consumer maximizes her total utility from a bundle of goods when her marginal utility from each good is equal.

40) The economic model of consumer behavior explains how consumers’ tastes and preferences are formed.