Chapter 19

Question 1

As you more and more of an item,, your total utility—– and your marginal utility——.

Answer 1

Rises and falls

Question 2

Which of these is true?

Answer 2

Total utility is maximized when marginal utility is zero

Question 3

A person would be maximizing her total utility when

Answer 3

Her marginal utility was zero

Question 4

As you consume more and more of a service

Answer 4

Your consume surplus is definitely increasing

Question 5

As a person buys increasing amounts of a good, her marginal utility ——– and her consumer surplus ——-.

Answer 5

Decreases and increases

Question 6

Mr. Federal had determined that the marginal utility of the last dollar he spent on cowboy boots is greater than the marginal utility of the last dollar spent on Nikes. Since he is a rational fellow, he will

Answer 6

Buy more cowboy boots and fewer Nikes

Question 7

Melissa says she will have to be paid in order to even try Jason’s cooking, so her marginal utility for Jason’s cooking is

Answer 7

Negative

Question 8

If total utility is degreasing, then

Answer 8

Marginal utility is less than zero

Question 9

If marginal utility is declining but still greater than zero, then total utility is

Answer 9

Increasing

Question 10

A person who wishes to maximize his satisfaction from the consumption of a product should consume until

Answer 10

Marginal utility is equal to zero

Question 11

The economist mostly associated with consumer surplus is

Answer 11

Alfred Marshall

Question 12

According to the general utility formula, the marginal utility of a good divided by the price of that good is

Answer 12

Equal to one

Question 13

If a restaurant served free steaks, people would consume more and more steaks until their ——– fell to zero.

Answer 13

Marginal utility

Question 14

If water became very scarce and diamonds became very plentiful

Answer 14

The marginal utility of water would rise and the marginal utility of diamonds would fall.

Question 15

We will keep buying blank audio cassettes until the a marginal utility of a cassette

Answer 15

Falls to the price of a cassette.

Question 16

The water-diamond paradox is resolved once we realize that the marginal utility of the last gallon of water consumed is very ——–and the marginal utility of the last diamond carat purchased is ……,

Answer 16

Low, high

Question 17

If you were in the middle of the desert, came upon a lemonade stand and paid $5 for a glass of lemonade

Answer 17

You would have gotten at least $5 of utility from the lemonade

Question 18

Kelly eats five alive of pizza on a Friday night but admits each slice of pizza doesn’t taste as good as the previous one. This suggests that for Kelly

Answer 18

The marginal utility of the slice of pizza is positive but decreasing

Question 19

We are maximizing our utility when the ——- of each good and service we purchase is equal to ——–.

Answer 19

Marginal utility and its price

Question 20

If your marginal utility fro

Your last session with your personal trainer is equal to the price she charged you, then

Answer 20

You have had the exactly the right number of sessions

Question 21

When total iritis increasing, marginal utility is

Answer 21

Positive

Question 22

As you go on more and more ski weekends, your total utility——- and your marginal utility ———.

Answer 22

Rises and declines

Question 23

Alfred Marshall discovered the concept of

Answer 23

Consumer surplus

Question 24

When marginal utility is zero, total utility

Answer 24

Is maximized

Question 25

As long as total utility is increasing, we know that marginal utility is

Answer 25

Positive