EC 201 Practice_Final Quiz 5

# EC 201 Practice_Final Quiz 5 - Practice Quiz Chapter 10...

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Practice Quiz - Chapter 10 April 25, 2010 3:07 PM April 25, 2010 3:23 PM 00:15:59 15/20 = 75% 1. MC01 The collection of all the goods and services you consume is your Student Response Value Correct Answer Feedback A. utility. B. marginal utility. C. total utility. D. consumption bundle. 100% Correct. Economic theory asserts that individuals choose the consumption bundle that will maximize their utility. Page: 231 Score: 1/1 2. MC02 Adam has a monthly income of \$840. He spends all of his money on two goods - leasing an apartment and eating at restaurants. If his apartment rent is \$560 per month, how many restaurant meals can he buy each month if the cost of each meal is \$14? Score: 1/1 3. MC03 Marcel consumes only tea and pastry. A cup of tea costs 5 euros and a pastry costs 8 euros. His weekly income is 450 euros. Marcel always drinks 2 cups of tea for every pastry he consumes. The optimal weekly consumption bundle for Marcel consists of

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Student Response Value Correct Answer Feedback A. 25 cups of tea and 50 pastries. B. 50 cups of tea and 25 pastries. 100% Correct. Because Marcel maintains this 2-to-1 ratio of tea-to- pastry, you can think of each unit of consumption as having a cost of 18 euros. Page: 236 C. 58 cups of tea and 20 pastries. D. 60 cups of tea and 30 pastries. Score: 1/1 4. MC04 Robinson spends all his money on fish and coconuts. His budget line is drawn with fish on the vertical axis and coconuts on the horizontal axis. If the price of fish increases, Student Response Value Correct Answer Feedback A. the vertical intercept will decrease. B. the horizontal intercept will decrease. C. the vertical intercept will increase. 0% Incorrect. Because the quantity of fish is measured on the vertical axis, it is only the vertical intercept that will be affected. The value of the vertical intercept is Robinson's income divided by the price of fish, so this price change means that his given income amount now will be divided by a larger number. Page: 237 D. the horizontal intercept will increase. Score: 0/1
5. MC05 Annette has maximized her utility by consuming both strawberry shakes and hamburgers. The price of hamburgers exceeds that of fries. Which of the following statements necessarily must be correct at her current consumption point? Student Response Value Correct Answer Feedback A. The total utility from strawberry shakes exceeds the total utility from hamburgers. B. The total utility from hamburgers exceeds the total utility from strawberry shakes. C. The marginal utility from the last strawberry shake exceeds the marginal utility from the last hamburger. D. The marginal utility from the last hamburger exceeds the marginal utility from the last strawberry shake. 100%

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EC 201 Practice_Final Quiz 5 - Practice Quiz Chapter 10...

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