Economics: Principles and Policies, 9e: Chapter

Chapter: Consumer Choice: Individual and Market Demand

Your Full Name:

Your Email Address: (required)

The Email address of an instructor to mail your quiz results:

1. When the price of a commodity falls, we can expect: a. total utility will fall.
b. marginal utility of the last unit purchased will fall.
c. marginal utility of the last unit purchased will rise.
d. purchases will fall because of a change in marginal utility

2. Americans choose cola over other flavors 70 percent of the time. Analysts say this is because cola's flavor is more robust and durable. Orange soda, for example, suffers from flavor fatigue faster than cola. Also, because cola contains caffeine, people may be addicted to the stimulant. Which panel in Figure 1 below best illustrates these facts? Figure 1: a. 1
b. 2
c. 3
d. 4

3. If the marginal utility to Juan of sleeping an extra hour (from 8 a.m. to 9 a.m.) is negative,: a. Juan is better off getting up at 8 a.m.
b. Juan is better off getting up at 9 a.m.
c. Juan's total utility from sleeping must be negative.
d. Juan's average utility from every hour he sleeps must be negative.

4. Which of the following statements is correct?: a. The law of diminishing marginal utility implies that demand curves slope upward to the right.
b. If the price of a good falls, the utility-maximizing consumer will assure that marginal utility rises.
c. If the price of a good falls, the consumer will purchase more of the good in order to maximize total utility.
d. MU and demand have different underlying consumer behavior assumptions.

5. An inferior good is one: a. produced by American industries.
b. whose quantity demanded falls when the purchaser's income rises.
c. ordinarily bought by college students from college-town merchants.
d. suitable for a garage sale.

6. A well-known women's college whose tuition lagged below similar schools found recruiting difficult and enrollment falling. A substantial tuition increase was effected, and dormitories were soon full again. This can be explained by: a. the law of demand.
b. the fact that education at the school was an inferior good.
c. the fact that people sometimes base perceptions of quality on price (snob effect).
d. demand was elastic.

7. The slope of an indifference curve is called the: a. bliss gradient.
b. happiness slope.
c. average transformation rate.
d. marginal rate of substitution.

8. If indifference curves and budget lines are used to analyze consumer choice, an inferior good will: a. escape detection when income rises.
b. be easily identified because the quantity purchased will fall as income rises.
c. be easily identified because the quantity purchased will rise as income rises.
d. be easily identified because it will change the slope of the budget line.
e. escape detection because this model does not show that relationship.

9. Hal initially consumes the combination marked as A in Figure 2 below. After his income increases, Hal consumes combination B. We can conclude that Hal views Figure 2: a. X as an inferior good and Y as a noninferior good.
b. X as a noninferior good and Y as an inferior good.
c. both X and Y as noninferior goods.
d. both X and Y as inferior goods.

10. Vicki consumes meatloaf and pizza. To keep her utility constant, you must give her more of one good if you take some of the other away. This information implies that: a. Vicki's marginal rate of substitution must be constant along her indifference curve.
b. Vicki's indifference curve must have a negative slope.
c. the prices Vicki must pay for meatloaf and pizza are always the same.
d. Vicki's marginal utility from each good must be constant along her indifference curve.