Utility Maximization in Consumer Choice
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Questions and Answers

What is the total utility obtained from a combination of goods X and Y?

  • 30
  • 40
  • 18
  • 70 (correct)

    • If the consumer is currently buying 3 units of X and 4 units of Y, what should they do to maximize utility?

  • Buy less of Y and the same amount of X
  • Increase both X and Y
  • Not change behavior (correct)
  • Increase Y and decrease X

    • What is the price of good Y in the given scenario?

  • $0.50
  • $1 (correct)
  • $2
  • $3

    • What is the maximum total utility from good X as indicated by the graphs?

    <p>80</p> Signup and view all the answers

    How much total income does the consumer have?

    <p>$10</p> Signup and view all the answers

    What must a utility-maximizing consumer equalize to maximize their expenditure?

    <p>Marginal utility per dollar spent across products</p> Signup and view all the answers

    Which point reflects the total utility of good Y as per the graph?

    <p>(9, 45)</p> Signup and view all the answers

    If the marginal utility of good Y decreases as more is consumed, what happens to the total utility from good Y?

    <p>It eventually decreases</p> Signup and view all the answers

    What is the total utility when 2 units of good X are consumed?

    <p>40</p> Signup and view all the answers

    What is the marginal utility of the fourth unit of good X?

    <p>Not provided</p> Signup and view all the answers

    How much total utility does consuming 0 units of good X generate?

    <p>0</p> Signup and view all the answers

    If a consumer increases their consumption from 1 unit to 2 units of good X, what is the additional utility gained?

    <p>5</p> Signup and view all the answers

    Considering the data, which total utility value could correspond to 4 units consumed if the pattern continues?

    <p>54</p> Signup and view all the answers

    What is the total utility at the consumption of 5 units if the marginal utility of the first four units remains consistent?

    <p>53</p> Signup and view all the answers

    What is the total utility when the consumer buys 2 units of good X?

    <p>101</p> Signup and view all the answers

    What is the pattern observed in the marginal utility as more units of good X are consumed?

    <p>It decreases progressively.</p> Signup and view all the answers

    What is the marginal utility of the third unit of good X?

    <p>9</p> Signup and view all the answers

    Which unit of good X has the lowest marginal utility?

    <p>8</p> Signup and view all the answers

    If the consumer chooses to buy only one unit of good X, what would be their marginal utility?

    <p>58</p> Signup and view all the answers

    At what unit level does the marginal utility fall below 20?

    <p>5</p> Signup and view all the answers

    What would the total utility be for consuming 3 units of good X?

    <p>132</p> Signup and view all the answers

    Which statement is true regarding marginal utility from the table?

    <p>Marginal utility decreases with each additional unit.</p> Signup and view all the answers

    What is the marginal utility of consuming the 6th unit of good X?

    <p>15</p> Signup and view all the answers

    What is the marginal utility for the second unit of good X consumed?

    <p>5</p> Signup and view all the answers

    What does the total utility equal when 5 units of good X are consumed, if F is the value for total utility?

    <p>53</p> Signup and view all the answers

    If the total utility for consuming 3 units of good X is represented as C, what is its value?

    <p>53</p> Signup and view all the answers

    What is the total utility when consuming 0 units of good X?

    <p>0</p> Signup and view all the answers

    Which letter corresponds to the total utility after consuming 1 unit of good X?

    <p>D</p> Signup and view all the answers

    What is the correct value for the missing marginal utility represented by A?

    <p>30</p> Signup and view all the answers

    How does the marginal utility change as more units of good X are consumed?

    <p>It consistently decreases.</p> Signup and view all the answers

    To find the total utility for 2 units of good X, which of the following calculations is accurate?

    <p>30 + 5</p> Signup and view all the answers

    What should C do to maximize her utility?

    <p>Buy more cheese and less bread</p> Signup and view all the answers

    Why does marginal utility analysis predict a downward-sloping demand curve for good X?

    <p>Consumers buy more as marginal utility per dollar spent is equalized</p> Signup and view all the answers

    What relationship must hold when John consumes goods A and B at maximum utility?

    <p>Marginal utility ratio equals the price ratio of A to B</p> Signup and view all the answers

    How is the market demand curve typically derived?

    <p>From horizontal summation of individual demand curves</p> Signup and view all the answers

    What happens when the price of good X decreases?

    <p>Marginal utility per dollar spent on good X increases</p> Signup and view all the answers

    When are utility-maximizing consumers likely to adjust their spending?

    <p>When the marginal utility per dollar spent is equalized</p> Signup and view all the answers

    Which statement about the utility-maximizing consumer is correct?

    <p>They strive to maximize total utility by equating marginal utilities</p> Signup and view all the answers

    What is the main implication of the equalization of marginal utility per dollar spent?

    <p>It leads to greater overall utility</p> Signup and view all the answers

    At a price of $2 for good X and $1 for good Y, how many units of good Y should the consumer purchase to maximize utility if he is currently buying 2 units?

    <p>3 units</p> Signup and view all the answers

    If the consumer continues to buy 4 units of good X, what would be the effect on his total utility if he reduced his purchase of good Y?

    <p>Total utility would decrease.</p> Signup and view all the answers

    Which of the following points corresponds to the marginal utility of good Y when considering 6 units of good Y?

    <p>(6, 4)</p> Signup and view all the answers

    How is the consumer's marginal utility of each good being maximized at the current consumption levels?

    <p>The marginal utility per dollar spent on Y equals that of X.</p> Signup and view all the answers

    Considering the consumer's total income of $10, which combination of units for goods X and Y does NOT maximize utility based on the given prices?

    <p>3 units of X and 7 units of Y</p> Signup and view all the answers

    What can be inferred about the relationship between total utility and marginal utility at higher levels of consumption of good Y?

    <p>Marginal utility declines but total utility continues to increase.</p> Signup and view all the answers

    What occurs if the consumer decides to buy fewer units of good X and more of good Y?

    <p>Total utility may increase, decrease, or remain the same.</p> Signup and view all the answers

    Which combination of good X and good Y will lead to an unbalanced marginal utility per dollar spent?

    <p>1 unit of X and 9 units of Y</p> Signup and view all the answers

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