1. The table below represents how Marco feels about chocolate candy bars.
a. Fill in the missing values for total and marginal utility.
|
Marco's Utility
|
|
Chocolate Candy Bars
|
Total Utility (utils)
|
Marginal Utility (utils)
|
|
0
|
0
|
-
|
|
1
|
25
|
|
|
2
|
|
17
|
|
3
|
54
|
|
|
4
|
|
|
|
5
|
66
|
4
|
|
6
|
|
-1
|
b. Suppose Marco currently has two candy bars. You tell Marco you will give him either a soda, which gives him 22 utils of happiness, or two additional candy bars. Which is he likely to prefer? Soda or Candy?
2. Marginal utility can be
A. positive, but not negative.
B. positive or negative, but not equal to zero.
C. positive, negative, or equal to zero.
D. decreasing, but not negative.
3. Total utility is best defined as the
A. change in marginal utility multiplied by the price of a product.
B. maximum amount of satisfaction from consuming a product.
C. total satisfaction received from consuming a good, service, or combination of goods and services.
D. additional satisfaction received from consuming an additional unit of a good or service.
4. A consumer with a limited income will maximize utility when each good is purchased in amounts such that the
A. total utility is the same for each good in a bundle.
B. marginal utility of each good in a bundle is maximized.
C. marginal utility per dollar spent on each of the final choices in a bundle is equal.
D. marginal utility per dollar spent on each of the final choices in a bundle is maximized for each good.
5. Sharon purchases two products, X and Y, with a given fixed budget. The marginal utility she receives from the last unit of X she consumes is 60 utils, and the marginal utility she receives from the last unit of Y she consumes is 30 utils. The price of X is $2.00 and the price of Y is $1.00. Based on the equal marginal principle, these data suggest that Sharon
A. is maximizing her total utility from the given fixed budget.
B. should buy more X and less Y.
C. should buy more Y and less X.
D. should buy less Y and X.