Download The principle of diminishing marginal utility states that as an

1.
a.
b.
c.
d.
The principle of diminishing marginal utility states that as an individual consumes more of a good:
the total utility obtained will eventually fall.
the total utility obtained will eventually become negative.
the addition to total utility obtained from the nth unit of the good will be less than that obtained
from the (n - 1) unit of the good.
the marginal utility will eventually become negative.
2.
a.
b.
c.
d.
The utility of a good is determined by how much ________ a particular consumer obtains from it.
satisfaction
usefulness
cost
need fulfillment
3.
Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and
125, respectively. The total utility when two units are consumed is:
150.
200.
350.
475.
a.
b.
c.
d.
4.
a.
b.
c.
d.
5.
The law of diminishing marginal utility indicates that the slope of the marginal utility curve
eventually becomes:
negative
vertical.
horizontal.
positive.
a.
b.
c.
d.
If total utility is rising as more of Good X is consumed, we can definitely say that marginal utility
is:
falling.
constant.
rising.
greater than zero.
6.
a.
b.
c.
d.
Marginal utility is best computed as the:
change in total utility from an additional unit consumed.
total utility divided by the total quantity consumed.
change in total utility divided by the total quantity consumed.
total utility divided by the change in quantity consumed.
7.
a.
b.
c.
d.
Jane spends all her income on Goods X and Y and is purchasing the optimal consumption bundle.
If the MUX/MUY = 3 and the price of X is equal to $12, then the price of Y is equal to:
$36.
$4.
$12.
$3.
8.
a.
b.
c.
d.
At the optimal consumption bundle:
the marginal utility of all goods consumed is equal.
the marginal utility per dollar spent is equal for all goods consumed.
the price of all goods consumed is equal.
total utility from all goods consumed is equal.
9.
If a consumer purchases a combination of commodities X and Y such that MUx/Px = 20 and MUy/Py
= 10, to maximize utility, the consumer should buy:
less of X and more of Y.
more of X and less of Y.
more of both X and Y.
a.
b.
c.
d.
less of both X and Y.
10. If a consumer buys more of Good X and less of Good Y, the ________ of Good X will ________,
and the ________ of Good Y will ________.
a. marginal utility; fall; marginal utility; rise
b. marginal utility; rise; marginal utility; fall
c. total utility; fall; marginal utility; rise
d. marginal utility; rise; total utility; rise
11. Sam always maximizes his utility in his consumption of popcorn and soft drinks. Both of these
goods are subject to diminishing marginal utility. Suppose the prices of these goods, along with
Sam's income, do not change, but Sam decides to decrease his consumption of popcorn. Holding
everything else constant, this means that Sam would need to:
a. increase his consumption of soft drinks, and his marginal utility per dollar spent on popcorn will
be greater than it was initially.
b. decrease his consumption of soft drinks, and his marginal utility per dollar spent on popcorn will
be greater than it was initially.
c. increase his consumption of soft drinks, and his marginal utility per dollar spent on popcorn will
be less than it was initially.
d. decrease his consumption of soft drinks, and his marginal utility spent on popcorn will be less than
it was initially.