QUESTION 1

1. The rational consumer is constantly striving to maximize his:

	A.	profits
	B.	leisure
	C.	utility
	D.	security

QUESTION 2

Refer to Table A. The marginal utility of the fifth widget is:

TABLE A

Widgets	Utility
0	0
1	80
2	150
3	190
4	220
5	235
6	245
7	250
8	252

	A.	15
	B.	10
	C.	220
	D.	235

QUESTION 3

TABLE A

Widgets	Utility
0	0
1	80
2	150
3	190
4	220
5	235
6	245
7	250
8	252

For this consumer, as he consumes more widgets his total utility is:

	A.	rising
	B.	falling
	C.	remaining constant
	D.	cannot be determined with the information given.

QUESTION 4

TABLE A

Widgets	Utility
0	0
1	80
2	150
3	190
4	220
5	235
6	245
7	250
8	252

For this consumer, as he consumes more widgets his marginal utility is:

	A.	rising
	B.	falling
	C.	staying the same
	D.	cannot be determined with the given information.

QUESTION 5

1. The relationship between the price of an item and the resulting quantity that will be demanded is:

	A.	direct
	B.	inverse
	C.	constant
	D.	none of the above

QUESTION 6

1. One reason for this relationship between price and quantity demanded (as cited in question 5) is that when the price of an item rises, ceteris paribus, the opportunity cost of making that purchase will:

	A.	rise
	B.	fall
	C.	stay constant
	D.	cannot be determined with the information given.

QUESTION 7

1. When the opportunity cost of making a purchase changes, ceteris paribus:

	A.	The quantity of that good demanded will change in the same direction.
	B.	The quantity of that good demanded will change in the opposite direction.
	C.	The quantity of that good demanded will not change.
	D.	The quantity of that good demanded will change, but more information is needed to determine the direction of change.

QUESTION 8

The relationship between the opportunity cost (or relative expensiveness) of purchasing an item and the quantity of that item demanded is known as the:

	A.	The supply effect
	B.	Income effect
	C.	Substitution effect
	D.	None of the above, there is no relationship between the opportunity cost of purchasing an item and the quantity demanded.

QUESTION 9

When the price of an item rises, ceteris paribus, the consumer's real income will:

	A.	rise
	B.	fall
	C.	remain constant
	D.	cannot be determined from the given information.

QUESTION 10

The relationship referred to in question 9 is known as the:

	A.	Opportunity Cost
	B.	Consumer effect
	C.	Substitution effect
	D.	Income effect

QUESTION 11

If a round of golf costs me $80, and I must take off six hours from work to play it, what is the total economic cost (refer to essay in COURSE DOCUMENTS section)of the round of golf. Assume that I make $40 per hour and I do not get paid for time away from the job? (Enter just the whole number -- no dollar signs, no decimal points, no words.)

QUESTION 12

For questions 12 - 14, refer to the document entitled Utility Maximizing Rule in the Module V section. Use the tables on the Resource Sheet for Test 5 as a scratch pad. Table B

				Budget = 10
	Price	=1				Price	=1
	Total	Marginal				Total	Marginal
Widgets	Utility	Utility	MU/P		Zercs	Utility	Utility	MU/P
0	0				0	0
1	500				1	100
2	900				2	190
3	1200				3	260
4	1380				4	300
5	1500				5	320
6	1580				6	330
7	1650				7	335
8	1700				8	338
9	1720				9	339
10	1730				10	340

Consider, Table A, above. If the budget is $10 and the price of both widgets and zercs is $1, determine the utility maximizing combination of widgets and zercs for this consumer to purchase. The utility maximizing combination of widgets and zercs is widgets and zercs. (E nter a whole number, 0 - 10, no decimals, no words - just the number of widgets and zercs, respectively.)

QUESTION 13

Table B

				Budget = 10
	Price	=2				Price	=1
	Total	Marginal				Total	Marginal
Widgets	Utility	Utility	MU/P		Zercs	Utility	Utility	MU/P
0	0				0	0
1	500				1	100
2	900				2	190
3	1200				3	260
4	1380				4	300
5	1500				5	320
6	1580				6	330
7	1650				7	335
8	1700				8	338
9	1720				9	339
10	1730				10	340

If the price of widgets rises to $2 and the price of zercs remains at $1, the utility maximizing combination of widgets and zercs is ------- widgets and zercs.------------ (Enter a whole number, 0 - 10, no decimals, no words - just the number of widgets and zercs, respectively.)

QUESTION 14

1. TABLE B

				Budget = 10
	Price	=1				Price	=2
	Total	Marginal				Total	Marginal
Widgets	Utility	Utility	MU/P		Zercs	Utility	Utility	MU/P
0	0				0	0
1	500				1	100
2	900				2	190
3	1200				3	260
4	1380				4	300
5	1500				5	320
6	1580				6	330
7	1650				7	335
8	1700				8	338
9	1720				9	339
10	1730				10	340

Now suppose the price of widgets goes back to $1 and the price of zercs rises to $2. The utility maiximizing combination of widgets and zercs is now----------- widgets and------------- zercs. (Enter a whole number, 0 - 10, no decimals, no words - just the number of widgets and zercs, respectively.)

QUESTION 15

The law of(three words)______ ________ ________explains why an indifference curve is convex to the origin. (Refer to lecture notes in COURSE CONTENTS section. Watch the spelling!)

QUESTION 16

The budget constraint is negatively sloped because:

	A.	Assuming that your tastes are constant, when you buy more of one good, you want less of another good.
	B.	Assuming that your income is a given, when you buy more units of one product you can afford fewer units of the other.
	C.	Neither of the above, the budget constraint is positively sloped.
	D.	Neither of the above, the budget constraint is horizontal.

Y a Xb course hero - Search X Homework Help - Q& x Bb Module V -- Theory o X x learn-us-east-1-prod- x Bb Take Test: Test 5 - 202 x As any economist wol X > The utility maximizing X + X C @ https://pgcconline.blackboard.com/webapps/assessment/take/launch.jsp?course_assessment_id=_549263_1&course_id=_394480_1&content_id=_13770144_1&step=... Yo Not syncing . . . Question Completion Status: QUESTION 30 4 points Save Answer ? A movement from the black to the red indifference curve/budget constraint indicates: W O A. the price of widgets has gone up, causing this consumer to consume fewer widgets (Z) and more zercs (Z). O B. the price of widgets has gone down, causing the conumer to consumer fewer widgets and more zercs. O C. the price of widgets has gone down, causing the consumer to consume more widgets (W) and fewer zercs (A). O D. the price of widgets has gone up, causing the consumer to consume more widgets and fewer zercs. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit Type here to search O 64.F Cloudy ~ 0 9 6 0 7 4). 1:42 PM 10/24/2021