11.

In the theory of utilitarianism, economists assume that:

A)

consumers will maximize their income subject to a budget constraint.

B)

while consumers are mostly rational, they occasionally indulge in impulse buying.

C)

people will spend their incomes so as to maximize their happiness.

D)

utility means usefulness.

12.

Jeremy Bentham believed that government should:

A)

promote the greatest happiness for the greatest number.

B)

own the means of production.

C)

stay out of the marketplace.

D)

be run by economists.

13.

Marginal utility is NOT:

A)

measured in utils.

B)

a measure of satisfaction.

C)

the same for all units of a commodity consumed.

D)

used to explain how consumers make decisions.

14.

A thirsty person has a second glass of water. Compared with the person's first glass total utility will:

A)

increase and marginal utility will decrease.

B)

increase and marginal utility will increase.

C)

decrease and marginal utility will increase.

D)

decrease and marginal utility will decrease.

15.

Astrid currently consumes only milk and honey. She drinks four quarts of milk priced at $3 per quart and gets 30 utils for the last quart. She consumes 13 jars of honey at a price of 75 cents per jar and gets 7.5 utils for the last jar. Is Astrid maximizing her utility?

A)

No. She should consume more milk.

B)

No. She should consume more honey.

C)

Yes.

D)

No. She should consume less milk.