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1. Using marginal utility analysis, consumers maximize their satisfaction when they
a. are able to get much more of one product than another.
b. are able to get credit and spend more than their current income.
c. are completely satiated.
d. spend their income in such a way that the marginal utilities per dollar are equal for all products.
2. If the utility derived from consuming the first unit is 12; from the second unit, 10; from the third unit, 8; from the fourth unit, 6; and from the fifth unit, 4; then the total utility derived from consuming four units is
3. Consumer surplus is
a. the extra utility from consuming one more unit of the product.
b. the difference between total and marginal utility.
c. the difference between the price consumers would be willing to buy a good for and the price in the market.
d. the difference between the price consumers would be willing to buy a good for and the good's marginal utility to the consumer.
4. Mary says, "You would have to pay me $50 to attend that pro wrestling event." For Mary, the marginal utility of the event is:
b. positive, but declines rapidly.
d. positive, but less than the ticket price.
5. Which of the following statements is not correct?
a. A reduction in money income will shift the budget line to the right.
b. A reduction in money income accompanied by an increase in product prices will necessarily shift the budget line to the left.
c. An increase in product prices will shift the budget line to the left.
d. An increase in money income will shift the budget line to the right.
6.Refer to the above data. The value for Y is:
7. Refer to the above data. The value for X is:
8. Refer to the above data. The value for W is:
9. Refer to the above data. The value for Z is:
10. The slope of a budget line reflects the:
a. elasticity of demand for the two products.
b. price ratio of the two products.
c. amount of the consumer's income.
d. utility ratio of the two products.