Utility winter 13.notebook. March 21, Mar 10 8:58 AM. Oct 18 8:09 AM. Oct 19 8:21 AM. Mar 21 8:02 AM. Increasing A B. Constant Decreasing Zero

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1 Volunteer Volunteer Volunteer Marginal Utility Total Utility Mar 10 8:58 M Oct 18 8:09 M amien has 14 hours per week to spend at the movies or the gym. Each movie visit and workout takes 2 hours. How should he allocate his time? per Week Marginal Movies per week Movies Marginal Movies Mar 10 9:00 M Oct 19 8:33 M elasticity questions 1 If a television commercial which asserts that the last bite tastes just as good as the first, is correct, then the marginal utility of the advertised product must be: Grade:«grade» Subject: ate:«date» Increasing onstant ecreasing Zero Mar 21 8:02 M Oct 19 8:21 M 1

2 2 Your marginal utility of hamburgers is: 3 s Shana s consumption of tacos increases, her: is always greater than your total utility from hamburgers is always greater than your average utility from hamburgers is always greater than the price of hamburgers depends on how many hamburgers you ve already eaten marginal utility from tacos increases marginal utility from tacos decreases total utility from tacos decreases both total and marginal utility from tacos decrease Oct 19 8:22 M Oct 19 8:23 M 4 Total utility will fall whenever: marginal utility is falling. marginal utility is rising. marginal utility has reached a maximum. marginal utility is zero. E marginal utility is negative. 5 The more Mabel exercises, the more she enjoys each visit to the gym. This is an example of: iminishing marginal utility onstant marginal utility Oct 19 8:24 M Oct 19 8:28 M 6 lthough Mei's classical collection is huge, her enjoyment from buying another has not changed as her collection has grown. This is an example of: iminishing marginal utility onstant marginal utility 7 When exter was a struggling student, his enjoyment from a good restaurant meal was greater than now, when he has them more frequently. This is an example of: iminishing marginal utility onstant marginal utility Oct 19 8:29 M Oct 19 8:33 M 2

3 8 The price elasticity of demand of a good is Which of the following statements is correct? 9 The demand for a particular brand of toothpaste: the demand for the good is elastic. the demand for the good is inelastic. the good is a necessity the good is a luxury is more elastic than the demand for toothpaste, because toothpaste is a necessity. is less elastic than the demand for toothpaste, because toothpaste is a necessity. is more elastic than the demand for toothpaste, because a particular brand always has close substitutes none of the above. Mar 21 8:02 M Mar 21 8:02 M 10 The demand for a product is likely to be more elastic under which two of the following circumstances? The time period involved is short. Few close substitutes in consumption The time period involved is long Many close substitutes in consumption. 11 newspaper publisher decides to cut price in order to raise circulation and revenue. This policy is more likely to be successful when demand for the newspaper is which one of the following? Unit elastic. Perfectly inelastic. Relatively inelastic. Relatively elastic. Mar 21 10:02 M Mar 21 8:02 M 12 Which of the following is likely to have the most elastic demand? 13 The greater the elasticity of supply: Food Fruit ananas ole brand bananas the more an increase in demand will increase price the more an increase in demand will increase quantity the steeper the supply curve, all else equal the more likely the product has no close substitutes Mar 21 8:03 M Mar 21 8:03 M 3

4 Oct 19 8:33 M 4

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