Microeconomics

According to marginal utility theory, consumers maximize satisfaction when they:

• can get much more of one good than another.

• can get credit and spend more than income

• equalize marginal utility per dollar for all goods.

• spend all of their money, leaving nothing over.

Sushi costs $8 and gives 25 utils, sashimi costs $4 and gives utils. Which item should one consume next and why?

• sushi; higher total utils

• sushi; higher Mu/$ than sashimi

• sashimi; lower total utils

• sashimi; higher mu/$ than sushi

EQUALIZE MARGINAL UTILITY PER DOLLAR FOR ALL GOODS.

• WHY TODD’S SECOND SODA IS LESS ENJOYABLE THAN HIS FIRST.

• WHY TODD’S FIRST SODA IS LESS ENJOYABLE THAN HIS SECOND.

• WHY AMY’S THIRD SODA IS LESS ENJOYABLE THAN TODD’S FIRST.

• WHY AMY’S THIRD SODA IS AS ENJOYABLE AS TODD’S FIRST.

A thirsty person has a second glass of water. Compared with the person's first glass total utility will:

• increase and marginal utility will decrease

• increase and marginal utility will increase

• decrease and marginal utility will increase

• decrease and marginal utility will decrease

To an economist, utility is:

• identical to profit

• a measure of consumer satisfaction

• the usefulness of a product

• consumer income

As more of a product is consumed, each additional unit offers less satisfaction is also known as:

• the law of decreasing total utility

• rationality

• marginal satisfaction

• diminishing marginal utility

Sharkey's Surfboards are all priced one cent lower than the next round dollar; for example, $89.99. This displays:

• altruism

• a sunk cost fallacy

• a framing bias

• overconfidence

If the price of salad decreases while the price of breadstick stays the same, the budget line will:

• shift outward

• shift inward

• pivot outward

• pivot inward

Suppose the price of a hamburger is $2 and the price of a soft drink is $1. If Jill has $10, then she can buy:

• three hamburgers and four soft drinks

• four hamburgers and three soft drinks

• as many hamburgers and soft drinks as she wants

• five hamburgers and five soft drinks

When income decreases, the budget line:

• rotates inward

• rotates outward

• shifts outward

• shifts inward