Economics Ch 10 Pre and Post Tests

Economics Ch 10 Pre and Post Tests - Your Results: The...

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Your Results: The correct answer for each question is indicated by a . 1 CORRECT If eating the first jelly bean gives you 15 units of utility and eating the second jelly bean gives you 10 additional units of utility, then the: A) total utility of two jelly beans is 10. B) total utility of two jelly beans is 25. C) marginal utility of the first jelly bean is 10. D) marginal utility of the second jelly bean is 15. Feedback: To find the total utility of two jelly beans, add the two marginal utility values together. 2 CORRECT Marginal utility is the: A) total satisfaction one gets from one's consumption of a product. B) additional satisfaction one gets from the consumption of another unit of a product. C) maximum satisfaction one can get from the consumption of a good. D) satisfaction one gets from the consumption of an additional unit of a product times its price. Feedback: See definition of marginal utility. 3 CORRECT Which of the following is the best example of the law of diminishing marginal utility? A) B) M&Ms are like potato chips; you can't eat just one. C) The more M&Ms I eat, the less I enjoy D) The more M&Ms I eat, the more I Feedback: The principle of diminishing marginal utility says that as you consume more of a good, you enjoy the additional units less than you did the preceding units. 4 CORRECT The principle of rational choice assumes people: A) consume until marginal utility begins to fall. B) maximize total utility. C) maximize marginal utility. D) maximize consumption.
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Feedback: Rational choice is the analysis of how individuals choose goods in order to maximize total utility. 5 CORRECT Economists assume that consumers will choose to purchase and consume the good that: A) costs the least. B) is of the highest quality. C) gives them the greatest additional satisfaction. D) gives them the greatest additional satisfaction per dollar spent. Feedback: The principle of rational choice states that one will spend money on those items for which one receives the highest utility per dollar. 6 CORRECT
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This note was uploaded on 12/03/2011 for the course ECON 101 taught by Professor Smith during the Fall '11 term at North Shore.

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Economics Ch 10 Pre and Post Tests - Your Results: The...

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