According to the traditional theory of marginal utility as presented in the

According to the traditional theory of marginal

This preview shows page 23 - 26 out of 63 pages.

70. According to the traditional theory of marginal utility as presented in the textbook, as more units of a good are acquired, the consumer's marginal utility
a. always continues to rise.b. diminishes.c. remains constant.d. may diminish at first, but it must eventually rise.e. may rise at first, but it must eventually become constant.ANSWER: bPOINTS: 1DIFFICULTY: ModerateNATIONAL STANDARDS: United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Utility and consumer choic - DISC: Utility and consumer choiceKEYWORDS: Bloom's: Comprehension 71. The theory of consumer choice assumes that consumers attempt to maximize United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Utility and consumer choic - DISC: Utility and consumer choiceKEYWORDS: Bloom's: Comprehension 72. If the marginal utility of a good is negative, then United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Utility and consumer choic - DISC: Utility and consumer choiceKEYWORDS: Bloom's: Comprehension73. Given that MUX/PX< MUY/PY, consumers who spend all their income on these two goods
United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Utility and consumer choic - DISC: Utility and consumer choiceKEYWORDS: Bloom's: Application 74. Suppose that a consumer purchases a combination of X and Y such that MUX/PX= 15 utils per dollar and MUY/PY= 10 utils per dollar. To maximize utility, the consumer should buy a. less of X and more of Y.b. more of X and less of Y.c. more of both X and Y.d. less of both X and Y.e. neither X nor Y.ANSWER: bPOINTS: 1DIFFICULTY: ModerateNATIONAL STANDARDS: United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Utility and consumer choic - DISC: Utility and consumer choiceKEYWORDS: Bloom's: Application75. Given two goods, X and Y, and their prices, PXand PYa consumer will maximize total utility by allocating expenditures such thata. MUX/PY= MUY/PX.b. PY/MUX= PX/MUY.c. MUX/PX= MUY/PY.d. MUX= PX= MUY= PY= MU$.e. MUX= MUY= PX= PY= MU$.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture