Chapter 6_ Consumer Choice Theory (Practice Quiz).txt

The cmount of added utility that a consumer gains from the consumption of one more unit of a good is called
A. Total utility.
B. Diminishing utility.
C. Incremental utility.
D. Marginal utility.

A certain consumer buys only food and compact discs. If the quantity of food bough increases, while that of compact discs remains the same, the marginal utility of food will
A. Rise, but not as fast as the marginal utility of compact discs rises.
B. Fall, but not as fast as the marginal utility of compact discs falls.
C. Rise relative to the marginal utility of compact discs.
D. Fall relative to the marginal utility of compact discs.

Rational consumers will continue to consume two goods until the
A. Marginal utility is the same for each good for the last dollar spent on each good.
B. Marginal utility per dollars worth of the two goods is the same for the last dollar spend on each good.
C. Prices of the two goods are unequal.
D. Prices of the two goods are equal for the last dollar spent on each good.

Assume that a person's consumption of just the right amounts of pork and chicken is in equilibrium. We can conclude that the
A. Marginal utility of pork must equal the marginal utility of chicken.
B. Ratio of marginal utility to price must be the same for pork and chicken.
C. Price of pork must equal the price of chicken.
D. Ratio marginal cost to price must be the same in both the pork and the chicken markets.

Assume and individual consumes only milk and doughnuts and has arranged consumption so that the last glass of milk yields 12 utils and the last doughnut 6 utils. If the pice of milk is $1 per glass and the price of doughnut is $0.50, we can conclude that the
A. Consumer should consume more milk and fewe doughnuts.
B. Price of milk is too high relative to doughnuts.
C. Consumer is in equilibrium.
D. Consumer should consume less milk and more doughnuts.

Suppose an individual consumes pizza and cola. To reach consumer equilibrium, the individual must consume pizza and cola so that the
A. Ratio of the marginal utility of cola to the marginal utility of pizza is 1.
B. Marginal utility of the two goods is the same.
C. Ratio of marginal utility to price is the same for both goods.
D. Price paid for the two goods is the same.

A state of consumer equilibrium for goods consumed prevails when the
A. Marginal cost per dollar spent on two goods is the same for the last dollar spent for each good.
B. Price of two goods is the same for the last dollar spent for each good.
C. Marginal utility of all goods is the same for the last dollar spent for each good.
D. Marginal utility per dollar's worth of two goods is the same for the last dollar spend for each good.

The change is quantity demaded resulting from a change is purchasing powr is known as the
A. Income effect.
B. Law of demand.
C. Substitution effect.
D. Consumer equilibrium effect.

In exhibit 4, assume multiplex tickets cost $6 each, video rentals cost $ 2 each, and bags of popcorn cost $1 each. What is the marginal utility of renting a tird video?