Economics Past Paper - Multiple Choice Questions

**MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.** 1\) Utility is 1) \_\_\_\_\_\_\_ A\) equal to the price of a good. B\) the value of a good. C\) the additional satisfaction received from consuming another unit of a good. D\) the practica...

**MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.** 1\) Utility is 1) \_\_\_\_\_\_\_ A\) equal to the price of a good. B\) the value of a good. C\) the additional satisfaction received from consuming another unit of a good. D\) the practical usefulness of a good. E\) the benefit or satisfaction from consuming goods and services. 2\) The fact that your fourth slice of pizza does not generate as much satisfaction as your third slice is an example of 2) \_\_\_\_\_\_\_ A\) diminishing total utility. B\) the law of demand. C\) the paradox of value. D\) consumer surplus. E\) diminishing marginal utility. 3\) The first can of Coke gives 15 units of utility to Witney, while the second can of Coke increases her total utility to 23. What is the marginal utility of the second can of Coke? 3) \_\_\_\_\_\_\_ A\) 11.5 units B) 38 units C) 8 units D) 24 units E) 7.5 units *Use the table below to answer the following questions.* **Table 8.2.1** 4\) Refer to Table 8.2.1. Consider Sam\'s utility from sailing and skiing. The price of sailing is \$10 per hour and the price of skiing is \$20 per hour; Sam\'s income to spend on these activities is \$80. In consumer equilibrium, Sam will sail for 4) \_\_\_\_\_\_\_ A\) 4 hours and ski for 2 hours. B\) 3 hours and ski for 2 hours. C\) 2 hours and ski for 4 hours. D\) 4 hours. E\) 8 hours. 5\) If a consumer spends all his income and his marginal utility per dollar is equal for all goods, then 5) \_\_\_\_\_\_\_ A\) he cannot be better off even with more income. B\) marginal utility is maximized. C\) total utility is maximized. D\) the number of units bought of each good must be equal. E\) the proportion of income spent on each good must be equal. 6\) Let *MUA* and *MUB* stand for the marginal utility of goods *A* and *B*, respectively. Let *PA* and *PB* stand for the price of goods *A* and *B*, respectively. Which statement must hold for consumer equilibrium? 6) \_\_\_\_\_\_\_ A\) *MUA* = *MUB* and *PA* = *PB* B\) *MUA* = *MUB* C\) *MUA**PB* D\) *MUA**PA* E\) *MUAPA* = *MUBPB* *Use the table below to answer the following questions.* **Table 8.2.2**  7\) Refer to Table 8.2.2. What is the total utility if 3 bags of popcorn and 2 bottles of pop are consumed? 7) \_\_\_\_\_\_\_ A\) 310 B) 660 C) 150 D) 100 E) 490 8\) Samir consumes apples and bananas and is in consumer equilibrium. The marginal utility from his last apple is 10 and the marginal utility from his last banana is 5. If the price of an apple is \$0.50, then what is the price of a banana? 8) \_\_\_\_\_\_\_ A\) \$0.25 B) \$0.50 C) \$0.10 D) \$0.05 E) \$1.00 *Use the table below to answer the following questions.* Windsurfing equipment rents for \$10 per hour and snorkeling equipment rents for \$5 per hour. **Table 8.3.1** 9\) Devon enjoys windsurfing and snorkeling. His total utility from each activity is summarized in Table 8.2.1. Devon has \$35 to spend. How long will Devon choose to windsurf and to snorkel? 9) \_\_\_\_\_\_\_ A\) 4 hours windsurfing and no hours snorkeling B\) 1 hour windsurfing and 5 hours snorkeling C\) 2 hour windsurfing and 4 hours snorkeling D\) 2 hours windsurfing and 3 hours snorkeling E\) 3 hours windsurfing and 1 hour snorkeling *Use the table below to answer the following questions.* **Table 8.2.3**  10\) Refer to Table 8.2.3. If income is \$13, then utility is maximized when consumption is 10) \_\_\_\_\_\_\_ A\) 6 units of *X* and 1 unit of *Y*. B\) 2 units of *X* and 9 units of *Y*. C\) 4 units of *X* and 5 units of *Y*. D\) 3 units of *X* and 7 units of *Y*. E\) 5 units of *X* and 3 units of *Y*.