1 As Bill Gates earns money, which of the following is true?

a) The more millions he earns, the lower his total utility

b) Each additional million will increase his total utility by more than the previous million

c) The marginal utility of each additional million will be greater than the previous million

d) Each additional million will decrease his total utility by more than the previous million

e) The marginal utility of his first million will be greater than his 10^th

2 The following table describes Melvin's utility for fur coats and gold chains.

Q of Fur Coats	0	1	2	3	4	5	6
Total Utility	0	40,000	60,000	70,000	75,000	77,000	78,000
Q of Gold Chains	0	1	2	3	4	5	6
Total Utility	0	20,000	30,000	35,000	38,000	39,000	39,500

If the price of a fur coat is $20,000 and the price of a gold chain is $5,000, how many fur coats will Melvin buy if he has $100,000 to spend and he is maximizing his utility?

a) Fur Coats = 2

b) Fur Coats = 3

c) Fur Coats = 4

d) Fur Coats = 5

e) Fur Coats = 6

3 Hungry after a long night of studying economics, Sheila goes to a pizzeria. Assuming Sheila purchases pizza by the slice, which one of the following is false?

a) Each slice Sheila consumes increases her total utility.

b) Each additional slice increases her total utility by less than the previous slice.

c) Sheila will not eat a slice that decreases her total utility

d) Sheila's marginal utility increases with each slice she consumes.

e) The marginal utility of each slice she consumes is equal to or greater than zero

4 Suppose the market for Popsicles is made up of a total of 8 consumers. Assume each one of the eight consumers have the same individual demand curve given below:

Price	0.4	0.8	1.20	1.60	2	2.40	2.80
Q Demanded	8	7	6	5	4	3	2

If the market supply curve can be given by:

Q Supplied	28	24	20	16	12	8	4
Price	2.80	2.40	2	1.60	1.20	0.80	0.40

What is the equilibrium price of Popsicles?

a) Price = 2.80

b) Price = 2.40

c) Price = 2

d) Price = 1.60

e) Price = 1.20

5 According to the income effect, when the price of an important good increases

a) People will buy more of other goods

b) People will buy less of other goods

c) The demand for the good becomes more elastic

d) The demand for the good becomes more inelastic

6 If Mr. McLean thinks the last dollar spent on bowling yields more satisfaction than the last dollar spent on hamburgers, and McLean is a utility-maximizing consumer, he should

a) bowl less, so the marginal satisfaction of bowling will increase

b) bowl more and spend less on hamburgers

c) spend more on hamburgers, so total satisfaction from hamburgers will increase

d) eliminate spending on hamburgers

7 When Steve had his 3rd child he received 800 marginal utility, causing his total utility to equal 5000 utility. If he decides to have a 4th child, which of the following answers could be his new total utility?

a) New total utility = 5500

b) New total utility = 6000

c) New total utility = 4500

d) New total utility = 4000

8 A local restaurant offers an "all you can eat" ribs special. You pay $11.95, and then you can eat as many servings as you desire at no additional cost. It would follow that you will stop eating when

a) your marginal utility received from eating another serving is zero

b) it is physically impossible for you to eat any more

c) your total utility received from all of the servings is zero

d) your marginal utility received from another serving equals $11.95

9 Timmy's demand curve contains the points (P=2, Q=3), (P=1.50, Q=4) and (P=1, Q = 6). Sue's demand curve contains the points (P=2, Q=1), (P=1.50, Q=3) and (P=1, Q=5). Ren's demand curve contains the points (P=2, Q=4), (P=1.50, Q=5) and (P=1, Q=6).

Assuming the market supply curve contains the points (P=2, Q=25), (P=1.50, Q= 21) and (P=1, Q=17), what is the market equilibrium price?

a) New price = $2

b) New price = $1.50

c) New price = $1

10 Suppose the price of hamburgers decreases. Which of the following is false?

a) The marginal utility per dollar of hamburgers will increase

b) The quantity of hamburgers demanded will increase

c) The substitution effect leads to more hamburger purchases

d) Assuming a given consumer eats hamburgers, their total utility will increase

e) The income effect leads to less purchases of goods and services in general