Questions:
1.The amount by which an additional unit of a good or service increases a consumer's total utility, all other things unchanged, is:
A) marginal utility.
B) maximum utility.
C) average utility.
D) required utility.
2.The marginal utility for the second unit is:
A) 35.
B) 15.
C) 10.
D) 5.
3.The marginal utility for the sixth unit is:
A) -5.
B) 0.
C) 5.
D) -10.
4.The amount by which total utility rises when an additional unit of a good is consumed is called:
A) average utility.
B) the law of diminishing returns.
C) incremental utility.
D) marginal utility.
5.Assume that the price of good X is $1 per unit and the price of good Y is $2 per unit, and you consume 4 units of good X and 2 units of good Y. To maximize utility, assuming that the goods are divisible, you would consume:
A) less of both X and Y.
B) more of both X and Y.
C) less of X and more of Y.
D) more of X and less of Y.
6.Which of the following equals marginal utility per $1?
A) It is the average utility of good X divided by the price of good X.
B) MUx/Px
C) TUx/Px
D) None of the above are correct.
7.A change in the ability to purchase a good because its price has increased is most closely related to the:
A) output effect.
B) income effect.
C) nominal effect.
D) substitution effect.
8.Total utility falls as marginal utility declines.
A) True
B) False
9.When MUx/Px > MUy/Py, the buyer should decrease the quantity of X purchased.
A) True
B) False
10.Total utility is maximized when marginal utility per additional dollar spent is the same for all goods.
A) True
B) False