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wayneyoo wayneyoo
wrote...
Posts: 304
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6 years ago
Fernando allocates his lunch money between pizza and Coke. A Coke has a price of 1 and a slice of pizza has a price of 1.50 . The marginal utility of the last slice of pizza Fernando ate today was 30, and the marginal utility of his last Coke was 25 . Fernando spent all of his lunch money. From this information we can conclude that
 a. Fernando allocated his money in a way that maximized his total utility
  b. Fernando's total utility would have been greater if he had purchased more Coke and less pizza
  c. Fernando's total utility would have been greater if he had purchased more pizza and less Coke
  d. Fernando could have increased his total utility by purchasing more Coke but the same quantity of pizza
  e. Fernando could have increased his total utility by purchasing more pizza but the same quantity of Coke

QUESTION 2

Your marginal utility of a third waffle is 10 and your marginal utility of a second piece of ham is 30 . If you eat the third waffle, which of the following must be true?
 a. You are irrational.
  b. You prefer waffles.
  c. The price of a waffle is less than one third the price of a piece of ham.
  d. The price of a waffle is more than the price of a piece of ham.
  e. The price of a waffle is three times the price of a piece of ham.

QUESTION 3

Suppose you eat at a restaurant that serves clams at a fixed price and crab legs at a price that varies based on market conditions. Each week, the marginal utility you attach to an order of crab legs is 100, and the marginal utility of an order of clams is 50 . One week you have crab legs, but the next week you have clams. This means that
 a. you are irrational
  b. your tastes must have changed
  c. the price of clams dropped below the price of crab legs
  d. the price of crab legs increased
  e. the price of crab legs must have increased to more than twice that of clams

QUESTION 4

Sally is allocating her budget between two goods, A and B. If Sally has used up the budget on a combination of A and B for which MUA/PA exceeds MUB/PB, she can increase total utility by buying
 a. more A and less B
  b. more B and less A
  c. more A without changing her consumption of B
  d. less B without changing her consumption of A
  e. more B and more A

QUESTION 5

A utility-maximizing consumer who is considering two goods, x and y, would allocate her budget in such a way that
 a. MUx = MUy
  b. MUx > MUy
  c. MUx/Px > MUy/Py
  d. MUx/Px = MUy/Py
  e. MUx/Px < MUy/Py

QUESTION 6

When income is allocated to two goods, x and y, consumer equilibrium occurs when
 a. MUx = MUy
  b. MUx = MUy, and the budget is exhausted
  c. MUx/Py = PUx/Py
  d. MUx/Py = PUx/Py, and some money is not spent
  e. MUx/Py = PUx/Py, and the budget is exhausted

QUESTION 7

Assume that you allocate your income to calzones and juice and that you have not yet spent your entire budget. If the marginal utility of a fourth calzone is 100 and the marginal utility of a third glass of juice is 50, you would
 a. eat a fourth calzone because it has higher marginal utility
  b. drink a third glass of juice
  c. drink a third glass of juice if its price is lower than the price of calzones
  d. drink a third glass of juice if its price is less than half the price of the calzone
  e. drink a third glass of juice because it has lower marginal utility

QUESTION 8

Assume that you allocate your income to calzones and juice and that you have not yet spent your entire budget. If the marginal utility of a fourth calzone is 100 and the marginal utility of a third glass of juice is 50, you would
 a. eat a fourth calzone because it has a higher marginal utility
  b. drink a third glass of juice because you've had less juice
  c. consider the total utility received so far from calzones and juice before deciding what to consume next
  d. consider the relative prices of calzones and juice before deciding what to consume next
  e. consider whether or not marginal utility is diminishing before deciding what to consume next

QUESTION 9

If Ellie Mae spends her income on possum and biscuits and the price of possum is three times the price of biscuits, then when Ellie Mae maximizes total utility, she will buy
 a. equal quantities of possum and biscuits
  b. three times as much possum as biscuits
  c. three times as many biscuits as portions of possum
  d. biscuits and possum until the marginal utility of possum is three times the marginal utility of biscuits
  e. biscuits and possum until the marginal utility of biscuits is three times the marginal utility of possum
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3 Replies

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Replies
wrote...
6 years ago
[Answer to ques. #1]  B

[Answer to ques. #2]  C

[Answer to ques. #3]  E

[Answer to ques. #4]  A

[Answer to ques. #5]  D

[Answer to ques. #6]  E

[Answer to ques. #7]  D

[Answer to ques. #8]  D

[Answer to ques. #9]  D
wayneyoo Author
wrote...
6 years ago
Confirmed correct!
wrote...
6 years ago
Cool, thanks for replying back
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