Practice test 6 - Marginal utility is best associated with...

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Sheet1 Page 1 Marginal utility is best associated with Correct Answer: Correct value in exchange. A consumer buys less chicken and more ham because the price of chicken has increased relative to the price of ham. This is a Correct Answer: Correct substitution effect. The income effect Correct Answer: Correct means that when the price of a good falls, the consumer's real income rises and the consumer buys m The change in total utility due to a one-unit change in the quantity consumed is Correct Answer: Correct marginal utility. Diminishing marginal utility Correct Answer: Correct is only for a given time period. Total utility is maximized when Correct Answer: Correct marginal utility equals zero. The marginal utilities associated with the first five units of consumption of good Y are 15, 15, 10, 7, and 3, respectively. What i s Correct Answer: Correct 50 Which of the following is not an implication of utility theory? Correct Answer: Correct Taxes hurt rich people less than they hurt poor people. Income limitations and the prices of goods purchased are important considerations in Correct Answer: Correct all of the above. _____________ assumed that utility could be measured numerically. Correct Answer: Correct The classical approach Diminishing marginal utility holds for Correct Answer: Correct a particular good only. Economists are concerned with Correct Answer: Correct what will happen to the demand for oil if the price goes up by $5.00 per barrel. A fall in marginal utility reflects Correct Answer: Correct the principle of diminishing marginal utility. The sum of the marginal utilities up to any one point in consumption is Correct Answer: Correct total utility. Marginal utility is defined as Correct Answer: Correct the change in total utility resulting from consuming one more or one less unit of the good. If the price of a normal good falls, real income
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This note was uploaded on 09/12/2011 for the course ECONOMICS 1110 taught by Professor Pavur during the Spring '10 term at University of Texas at Austin.

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Practice test 6 - Marginal utility is best associated with...

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