Chapter 20 Consumer Choice 135
48)
J
ill likes lobsters but she does not eat lobsters in every meal. How can utility theory explain this?
20.4 Optimizing Consumption Choices
1) In order to maximize utility, a consumer should allocate money income so that
A) the marginal utility of the last unit of each product consumed is greater than the total
utility of each product consumed.
B) the total utility derived from each product consumed is the same.
C) the marginal utility obtained from the last dollar spent on each product is the same.
D) the elasticity of demand on all products purchased is the same.
2) Suppose Isaac s marginal utility from attending his 5th White Sox game was 40 and the
marginal utility from attending his 1st U2 concert was 200. Assume that the price of a Sox ticket
is $20 and the price of a U2 ticket is $120. Which of the following would be true?
A) Isaac would attend more U2 concerts and less Sox games.
B) Isaac would attend more Sox games and less U2 concerts.
C) Isaac would not alter his behavior.
D) Isaac would attend less of both Sox games and U2 concerts.
3) If a consumer concludes that the marginal utility of the last dollar spent on vegetables exceeds
the marginal utility of the last dollar spent on junk food, he will respond by
A) consuming relatively more junk food and fewer vegetables.
B) consuming relatively more vegetables and less junk food.
C) consuming equal amounts of vegetables and junk food.
D) halting consumption of junk food altogether.
4) For good A and good B, the consumer maximizes personal satisfaction when
A) MUA/PAPB/MUB. B) PA
/
MUAPB
/
MUB.
C) MUA/PAMUB/PB. D) MUA
/
MUBPA
/
PB.
Bob s Marginal Utility for consuming beer and pizza with $8.00 in income
Quantity Marginal Quantity of Marginal
of Pizza Utility Beer Utility
1 45 1 40
2 40 2 40
3 30 3 35
4 15 4 10
55 5 0
5) In the above table, Bob experiences diminishing marginal utility after consuming how many
pieces of pizza?
A) 1 B) 2 C) 3 D) 4
6) In the above table, Bob experiences diminishing marginal utility after consuming how many
beers?
A) 1 B) 2 C) 3 D) 4
7) In the above table, how much total utility does Bob get from consuming 4 beers?
A) 10 utils B) 45 utils C) 125 utils D) 115 utils
8) According to the above table, how much total utility does Bob get from 3 pieces of pizza?
A) 30 utils B) 85 utils C) 115 utils D) 130 utils
9) In the above table, how much beer and pizza will Bob consume if the price of a piece of pizza is
$2.00 and the price of a beer is $2.00?
A) 1 piece of pizza and 3 beers B) 2 pieces of pizza and 2 beers
C) 2 pieces of pizza and 3 beers D) 3 pieces of pizza and 1 beer
10) Referring to the above table, suppose Bob s ratios of marginal utility of beer to the price of beer
and the marginal utility of pizza to the price of pizza are equal. If the price of beer increases
A) Bob will probably consume more beer and less pizza.
B) Bob will probably consume less beer and less pizza.
C) Bob will probably consume less beer and more pizza.
D) Bob will still consume the same amount of beer and pizza.
11) Assume that Jackie concludes that he should eat less and play racquetball more. In this
situation, it must be true that the marginal utility of the last dollar spent on food is
A) more than the marginal utility of the last dollar spent on racquetball.
B) less than the marginal utility of the last dollar spent on racquetball.
C) equal to the marginal utility of the last dollar spent on racquetball.
D) negative and less than the marginal utility of the last dollar spent on racquetball.
12) For any two goods, X and Y, if MUXdivided by PXequals 2.5 and MUYdivided by PYequals
4.0, then with given income and prices the consumer should
A)
b
uy more of good X and less of good Y.
B)
b
uy more of good Y and less of good X.
C)
b
uy all of good Y and no X.
D) stop because an equilibrium is achieved.
13) Dr. Rodriguez is consuming beer and wine. At his current level of consumption, the marginal
utility per dollar is 30 units for beer and 15 units for wine. Dr. Rodriguez should
A) consume twice as much beer as wine.
B) consume twice as much wine as beer.
C) increase his consumption of beer relative to wine.
D) increase his consumption of wine relative to beer.
14) Despite the fact that water is necessary to sustain life, it is less expensive than soft drinks.
Economic theory suggests that this is so because
A) there is a conspiracy among soft drinks producers to hold prices artificially high.
B) although the total utility of water consumption is high, its marginal utility per dollar spent
is low when compared to soft drinks.
C) consumers are irrational.
D) sellers of water hold the price of water artificially low because of its importance.
15) The consumer optimum for consuming two goods is achieved when
A) the total utility from each good is equal.
B) the price of each good is equal.
C) the price multiplied by the marginal utility is equal for the two goods.
D) the marginal utility per last dollar spent is equal for the two goods.
16) The consumer optimum (for two goods, a and b) is reached when
A) TUaTUb. B) MUaMUb.
C) TUa/PaTUb/Pb. D) MUa
/
PaMUb/Pb.
17) The price of good a is $5 and the price of good b is $15. If the marginal utility of good a is
20 then the marginal utility of good b must be ________ to have an optimum combination of
goods purchased.
A) 4 B) 20 C) 60 D) 80
18) The marginal utility of good A is 6 and the marginal utility of good B is 15. The price of good A
is $2. The price of good B must be ________ if the consumer is optimizing her utility.
A) $2 B) $5 C) $45 D) $15
19) When the marginal utility per dollar of good x exceeds the marginal utility per dollar of good y,
A) the consumer should consume more of good x.
B) the consumer is consuming too much of good x.
C) good y must have a negative marginal utility.
D) the consumer is in an optimal situation if the price of good x exceeds the price of good y.
20) Assume that the marginal utility from good x is 10 units and that the price of good x is $5 per
unit. The marginal utility from good y is 15 units and its unit price is $7. In this situation, a
utility maximizing consumer should
A) consume more of good x. B) consume only good y.
C) consume more of good y. D) consume neither x nor y.
21) Using the utility optimizing model, which of the following would induce a consumer to
increase consumption of good x, a normal good?
A) An increase in the marginal utility of x
B) A decrease in the total utility of y
C) An increase in the marginal utility of good y
D) A decrease in income
22) In a restaurant we can observe people consuming coffee, tea, and soft drinks. All are priced the
same. If Sally consumes coffee and Ali consumes soft drinks, we can conclude that
A) Bill will be drinking tea.
B) Sally likes coffee more than Ali does, and Ali likes soft drinks more than Sally does.
C) Sally derives more utility from coffee than from tea or soft drinks, and Ali derives more
utility from soft drinks than from tea or coffee.
D) the utility Sally receives from coffee consumption equals the utility that Ali receives from
consuming soft drinks.
23) Consumers do not buy as many units of each good as they want because
A) of the law of diminishing marginal utility.
B) they have limited incomes.
C) they do not know what they want in all situations.
D) eventually marginal utility equals zero.
24) The consumer optimum is the set of goods and services, subject to the limited income of the
consumer, that
A) the consumer can afford to buy.
B) is characterized by zero marginal utility on each good and service.
C) maximizes the level of satisfaction for each consumer.
D) is characterized by increasing marginal utility.
25) A consumer with unlimited income will continue consuming goods until
A) the marginal utility of each is equal to zero.
B) the marginal utility of each is negative.
C) total utility rises.
D) marginal utility equals total utility.
26) The price of a hamburger is $1, the price of a movie is $5, and the consumer has $13. A
consumer has purchased 3 hamburgers and two movies, receiving 10 units of utility for the last
hamburger and 10 units of utility for the last movie. The set of goods
A) is an optimum since the entire income is spent and the marginal utility is the same for the
last unit of each good.
B) is an optimum because the consumer has maximized her utility given the limited income
she had.
C) is not an optimum because the marginal utility per dollar spent is greater for the
hamburger than for the movie.
D) is not an optimum because the marginal utility for the second hamburger was less than the
marginal utility for the first hamburger.
27) A consumer has spent all of his funds on hamburgers and movies. The price of a hamburger is
$1 and the price of a movie is $5. The marginal utility of the last hamburger is 5 and the
marginal utility of the last movie is 40. This consumer has
A) not maximized utility. To maximize utility, he should cut back on movies and buy more
hamburgers.
B) not maximized utility. To maximize utility, he should cut back on hamburgers and buy
more movies.
C) not maximized utility. To maximize utility, he should cut back consumption of each.
D) maximized utility.
142 Miller Economics Today, 16th Edition
Quantity of Total Quantity of Total
Hamburgers/Wk Utility Movies/Wk Utility
0 0 0 0
1 25 1 200
2 45 2 260
3 55 3 300
4 60 4 320
5 61 5 325
28) Refer to the above table. Assume the consumer spends his entire income. If the consumer s
optimum at the current price of a movie is at 4 hamburgers and 4 movies, and the price of a
hamburger is $1, what is the consumer s income?
A) $28 B) $20 C) $16 D) $40
29) Refer to the above table. Assume the consumer spends his entire income. The price of a
hamburger is $1, the price of a movie is $6, and the consumer has $15. What is the consumer s
optimum?
A) 2 hamburgers and 2 movies B) 3 hamburgers and 2 movies
C) 4 hamburgers and 4 movies D) 0 hamburgers and 2.5 movies
30) When Stephanie increases the consumption of pizza and decrease the consumption of soda, her
marginal utility of
A) pizza falls and the marginal utility of soda will increase.
B)
b
oth pizza and soda will decrease.
C) pizza increases and the marginal utility of soda will fall.
D)
b
oth pizza and soda will increase.
Chapter 20 Consumer Choice 143
Quantity of Total Quantity of Total
Magazines/Wk Utility Paperback Books/Wk Utility
0 0 0 0
1 50 1 300
2 90 2 500
3 120 3 600
4 130 4 650
5 132 5 675
6 132 6 680
31) The price of a magazine is $2, the price of a paperback book is $5, and the consumer has $33.
According to the above table, the rational consumer will purchase
A) 1 magazine and 2 books. B) 2 magazines and 3 books.
C) 4 magazines and 5 books. D) 5 magazines and 6 books.
32) Refer to the above table. If a consumer s optimum consists of 3 magazines and 6 books, then
A) the price of a magazine is six times more than the price of a book.
B) the price of a magazine is three times more than the price of a book.
C) the price of a book is more than five times more than the price of a magazine.
D) the price of a book is six times more than the price of a magazine.
33) According to utility theory, consumer purchase decisions are made such that
A) the value of the ratio of marginal utility to price for the last units purchased and consumed
is equal.
B) the difference between the value of the marginal utility of the last unit purchased and the
price paid is maximized.
C) the total utility of the last unit purchased is equal to the price of that unit.
D) the total utility from consuming the good is less than the marginal utility of the last unit
consumed.
34) Consumers usually buy fewer units of a good than the quantity that would maximize total
utility from consuming the good because
A) they are not rational.
B) of the law of demand.
C) they have limited incomes.
D) marginal utility becomes zero after just a few units of the good.
35) The consumer optimum is defined as
A) the set of goods and services that maximizes marginal utility for each good.
B) the set of goods and services such that the marginal utility of each good equals zero.
C) the set of goods and services that maximizes the marginal utility of each good consumed.
D) the set of goods and services, subject to the limited income of the consumer, that
maximizes the total utility of the consumer.
36) The set of goods and services that maximizes the level of satisfaction for each consumer subject
to limited income is
A) the consumer optimum. B) diminishing marginal utility.
C) increasing marginal utility. D) substitution effect.
37) A consumer s optimum is found when
A) the marginal utility of the last dollar spent equals zero for each good.
B) the marginal utility of each good is increasing and the total income is spent.
C) the total utility of each good is the same and the total income is spent.
D) the marginal utility of the last dollar spent on each good is the same and all income is
spent.
38) A consumer s optimum is found when
A) prices of goods go down.
B) the consumer is achieving the maximum level of utility given market prices and their
limited income.
C) the marginal utility of the last dollar spent equals 0 for every good.
D) the consumer saves part of their income.
39) A consumer has spent all of his income on hamburgers and movies. The price of a hamburger is
$1 and the price of a movie is $6. The marginal utility of the last hamburger is 5 and the
marginal utility of the last movie is 24. The consumer has
A) maximized utility.
B) not maximized utility. He should cut back on movies and buy more hamburgers.
C) not maximized utility. He should cut back on hamburgers and buy more movies.
D) not maximized utility. He should cut back consumption of each good.
40) The price of a hamburger is $1, and the price of a movie is $6. The consumer has purchased 2
hamburgers and 2 movies, and her marginal utility from the second hamburger is 20 and from
the second movie is 120. The consumer has an income of $21. This combination of goods
A) maximizes utility and is an optimum because the marginal utility of the last dollar spent
on each good is the same.
B) maximizes utility because the marginal utility of the last dollar spent on each good is the
same, but it is not an equilibrium because marginal utility is not zero.
C) is not an optimum because the consumer has not spent all of her money.
D) is not an optimum because the marginal utility of the last dollar spent on each good is not
the same.
41) The price of a hamburger is $1 and the price of a movie is $6 and the consumer has $14. A
consumer has purchased 2 hamburgers and 2 movies, receiving 20 units of utility for the second
hamburger and 100 units of utility for the second movie. The set of goods
A) is an optimum since the entire income is spent and the marginal utility per dollar spent is
the same for the last unit of each good.
B) is an optimum since the entire income is spent and total utility is maximized.
C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers
than for movies and the consumer is not spending all of his income.
D) is not an optimum because the marginal utility for each good is not equal.
42) The price of a hamburger is $1 and the price of a movie is $4 and the consumer has $10. A
consumer has purchased 2 hamburgers and 2 movies, receiving 25 units of utility for the second
hamburger and 100 units of utility for the second movie. The set of goods
A) is an optimum since the entire income is spent and the marginal utility per dollar spent is
the same for the last unit of each good.
B) is an optimum since the entire income is spent and total utility is minimized.
C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers
than for movies.
D) is not an optimum because the consumer has not spent all of his money.
43) The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income.
The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is
also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods
A) is an optimum since the entire income is spent and the marginal utility per dollar spent is
the same for the last unit of each good.
B) is an optimum since the entire income is spent and total utility is minimized.
C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers
than for movies.
D) is not an optimum because the consumer has not spent all of his money.
44) The price of hamburgers is $2 and the price of movies is $4. The consumer has $16 of income.
The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is
also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods
A) is an optimum since the entire income is spent and the marginal utility per dollar spent is
the same for the last unit of each good.
B) is an optimum since the entire income is spent and total utility is maximized.
C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers
than for movies.
D) is not an optimum because the consumer has not spent all of his money.
45) The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income.
The consumer is purchasing 3 hamburgers and receiving 30 utils for the last hamburger. He is
also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods
A) is an optimum since the entire income is spent and the marginal utility per dollar spent is
the same for the last unit of each good.
B) is an optimum since the entire income is spent and total utility is maximized.
C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers
than for movies.
D) is not an optimum because the consumer has not spent all of his money.
46)
J
ohn is currently spending all of his income. For the last unit of Good A consumed John gets 20
utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The
price of Good B is $1. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B
47)
J
ohn is currently spending all of his income. For the last unit of Good A consumed John gets 20
utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The
price of Good B is $2. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B
48)
J
ohn is currently spending all of his income. For the last unit of Good A consumed John gets 20
utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $1. The
price of Good B is $10. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B.
49)
J
ohn is currently spending all of his income. For the last unit of Good A consumed John gets 20
utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The
price of Good B is $1. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B.
50)
J
ohn is currently spending all of his income. For the last unit of Good A consumed John gets 20
utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $2. The
price of Good B is $5. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B.
51)
J
ohn is currently spending all of his income. For the last unit of Good A consumed John gets 20
utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The
price of Good B is $5. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B.
52) When Bonnie increases the consumption of Good A and decrease the consumption of Good B,
her marginal utility of
A) A falls and the marginal utility of B will increase.
B)
b
oth A and B will decrease.
C) A increases and the marginal utility of B will fall.
D)
b
oth A and B will increase.
Quantity of Total Quantity of Total
Hamburgers/Wk Utility Broadway Shows/Wk Utility
1 40 1 400
2 60 2 700
3 76 3 850
4 86 4 950
5 91 5 1000
6 93 6 1025
53) Refer to the above table. If the price of a hamburger is $2, the price of a Broadway Show is $60,
and the consumer has $128, what is the consumer optimum?
A) 2 hamburgers and 2 Broadway shows. B) 2 hamburgers and 3 Broadway shows.
C) 3 hamburgers and 2 Broadway shows. D) 4 hamburgers and 2 Broadway shows.
54) Refer to the above table. If the price of a hamburger is $2, the price of a Broadway Show is $60,
and the consumer has $190, what is the consumer optimum?
A) 4 hamburgers and 2 Broadway shows. B) 5 hamburgers and 3 Broadway shows.
C) 6 hamburgers and 0 Broadway shows. D) 0 hamburgers and 6 Broadway shows.
55) If the price of X is $3 and the price of Y is $5, then, in a consumer optimum,
A) the quantity purchased of Y must be 60 percent of the quantity of X purchased.
B) the quantity purchased of Y must be 67 percent of the quantity of X purchased.
C) the marginal utility of Y must be 67 percent more than the marginal utility of X.
D) the marginal utility of X must equal 3 and the marginal utility of Y must equal 5.
Quantity of Total Quantity of Total
Magazines/Wk Utility Paperbacks/Wk Utility
0 0 0 0
1 60 1 200
2 100 2 400
3 130 3 500
4 140 4 550
5 142 5 575
6 142 6 580
56) Refer to the above table If the price of a magazine is $2 and the price of a paperback book is $5
and the consumer has $40, the rational consumer will purchase
A) 2 magazines and 2 books. B) 2 magazines and 3 books.
C) 5 magazines and 6 books. D) 6 magazines and 6 books.
57) Refer to the above table. If the price of a magazine is $2 and the price of a paperback book is $5
and the consumer has $19, the rational consumer will purchase
A) 2 magazines and 2 books. B) 2 magazines and 3 books.
C) 5 magazines and 6 books. D) 6 magazines and 6 books.
58) Refer to the above table. If the price of a magazine is $2 and the price of a paperback book is $5
and the consumer has $33, the rational consumer will purchase
A) 2 magazines and 2 books. B) 2 magazines and 3 books.
C) 5 magazines and 6 books. D) 4 magazines and 5 books.
59) Refer to the above table. If the consumer s equilibrium consists of 4 magazines and 4 books, then
we know that
A) the price of a magazine is 5 times more than the price of a book.
B) the price of a magazine is 6 times more than the price of a book.
C) the price of a book is 5 times more than the price of a magazine.
D) the price of a book is 3 times more than the price of a magazine.
60) Refer to the above table. If the consumer s equilibrium consists of 3 magazines and 6 books, then
we know that
A) the price of a magazine is 4.5 times more than the price of a book.
B) the price of a magazine is 6 times more than the price of a book.
C) the price of a book is 2 times more than the price of a magazine.
D) the price of a book is 3 times more than the price of a magazine.
152 Miller Economics Today, 16th Edition
Quantity Quantity
of A TUaof B TUb
1 18 1 10
2 33 2 18
3 42 3 22
4 48 4 24
5 51 5 25
61) The price of product A is $3, the price of product B is $2, and you have $18 to spend. What
combination of product A and product B will give you the most satisfaction?
A) 5 units of product A; 1 unit of product B
B) 4 units of product A and 3 units of product B
C) 2 units of product A and 5 units of product B
D) 3 units of product A and 5 units of product B
Quantity Quantity Quantity
of A MUaof B MUbof C MUc
1 15 1 12 1 15
2 12 2 10 2 10
3 9 3 8 3 5
4 6 4 4 4 4
62) Based on the information in the above table, the price of A is $3, the price of B is $2, and the
price of C is $5. If Mary has $22 to spend, what combination of products A, B, and C should she
buy in order to maximize her satisfaction?
A) 3 units of product A; 3 units of product B; 1 unit of product C
B) 2 units of product A; 3 units of product B; 2 units of product C
C) 3 units of product A; 4 units of product B; 0 units of product C
D) 2 units of product A; 1 unit of product B; 4 units of product C
63) Based on the information in the above table, what is the total satisfaction Mary can achieve if she
is a wise consumer?
A) 111 utils B) 82 utils C) 74 utils D) 30 utils
Chapter 20 Consumer Choice 153
Quantities MUapples(Adam) MUoranges(Adam) Quantities MUapples(Eve) MUoranges(Eve)
1 40 30 1 15 20
2 30 20 2 10 15
3 25 15 3 8 12
4 20 12 4 5 10
64) Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. The marginal utilities for
Adam and Eve are summarized in the above table. Adam asks Eve to exchange one of her
apples for an orange.
A) Eve will be willing to make the exchange, because her total satisfaction will remain
unchanged.
B) Eve will be willing to make the exchange, because her total satisfaction will increase.
C) Eve will be unwilling to make the exchange, because she loses 5 utils of satisfaction.
D) Eve will be unwilling to make the exchange, because she loses 15 utils of satisfaction.
65) Use the above table. Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. Eve asks
Adam to give her an apple in exchange for an orange. Should Eve go through with this
exchange?
A) Yes. This way she will have 3 apples, which will give her more total satisfaction.
B) Yes. She is indifferent between consuming apples and oranges.
C) No. She gives up more satisfaction than she gets.
D) No. Adam likes apples more than oranges.
66) Your allergies are bad this summer so your allergist writes you a prescription to relieve your
symptoms. When you get to the pharmacy, you notice the name brand allergy medicine is more
expensive than its generic equivalent. You purchase the generic equivalent and demonstrate all
of the following EXCEPT
A) the principle of substitution of one product for another.
B) the principle of diminishing marginal utility.
C) when price decreases, the quantity demanded increases.
D) a price change may affect consumer optimum.
67) A consumer is buying the optimal amount of goods when
A) the total utility from the purchases on all the goods purchased is the same.
B) the marginal utility from the purchases of all the goods purchased is the same.
C) the marginal utility per last dollar spent on all of the goods purchased is the same.
D) the marginal utility from the purchases of all the goods is equal to 1.
68) When a consumer is at the consumer optimum,
A) MUaMUbMUc. . . MUn.
B) MUa
/
PaMUb
/
PbMUc
/
Pc. . . MUn
/
Pn1.
C) TUaTUbTUc. . . TUn.
D) MUa
/
PaMUb
/
PbMUc
/
Pc. . . MUn
/
Pn.
69) Which of the following best describes the consumer optimum?
A) MUa
/
PaTUb
/
PbB) MUa
/
TUaPa
C) MUa
/
PaMUb
/
Pb. . . MUz
/
PzD) change in TU/change in P MU
70) A consumer who has chosen the right mix of goods and services to maximize his or her utility is
said to have achieved
A) consumer equilibrium. B) consumer benefit.
C) consumer surplus. D) consumer optimum.
71) When DVDs and hamburgers were the same price, Mavis consumed 3 hamburgers and 5 DVDs,
and Mavis received 10 utils from the last hamburger and 15 utils from the last DVD consumed.
What should be Mavis consumption strategy?
A) consume more DVDs and fewer burgers B) consume more burgers and fewer DVDs
C) consume more of both items D) consume less of both items