Chapter 19 Flashcards
As you more and more of an item,, your total utility—– and your marginal utility——.
Rises and falls
Which of these is true?
Total utility is maximized when marginal utility is zero
A person would be maximizing her total utility when
Her marginal utility was zero
As you consume more and more of a service
Your consume surplus is definitely increasing
As a person buys increasing amounts of a good, her marginal utility ——– and her consumer surplus ——-.
Decreases and increases
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
Buy more cowboy boots and fewer Nikes
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
Negative
If total utility is degreasing, then
Marginal utility is less than zero
If marginal utility is declining but still greater than zero, then total utility is
Increasing
A person who wishes to maximize his satisfaction from the consumption of a product should consume until
Marginal utility is equal to zero
The economist mostly associated with consumer surplus is
Alfred Marshall
According to the general utility formula, the marginal utility of a good divided by the price of that good is
Equal to one
If a restaurant served free steaks, people would consume more and more steaks until their ——– fell to zero.
Marginal utility
If water became very scarce and diamonds became very plentiful
The marginal utility of water would rise and the marginal utility of diamonds would fall.
We will keep buying blank audio cassettes until the a marginal utility of a cassette
Falls to the price of a cassette.
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 ……,
Low, high
If you were in the middle of the desert, came upon a lemonade stand and paid $5 for a glass of lemonade
You would have gotten at least $5 of utility from the lemonade
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
The marginal utility of the slice of pizza is positive but decreasing
We are maximizing our utility when the ——- of each good and service we purchase is equal to ——–.
Marginal utility and its price
If your marginal utility fro
Your last session with your personal trainer is equal to the price she charged you, then
You have had the exactly the right number of sessions
When total iritis increasing, marginal utility is
Positive
As you go on more and more ski weekends, your total utility——- and your marginal utility ———.
Rises and declines
Alfred Marshall discovered the concept of
Consumer surplus
When marginal utility is zero, total utility
Is maximized
As long as total utility is increasing, we know that marginal utility is
Positive
