Question

QUESTION 1

The total measure of satisfaction from consuming a specified number of goods is called

		Marginal costs
		Utility
		Marginal Utility
		total costs

QUESTION 2

The amount of satisfaction from the last unit consumed.

		average costs
		total utility
		Marginal utility
		marginal costs QUESTION 3 As more and more of a product in consumed, ________________. marginal utility stays the same marginal utilty increases marginal utility turns into average utility marginal utility decreases QUESTION 4 If the marginal utility per dollar is currently higher for product A than product B, then we could predict that ________________ would be consumed. more of product B less of product B more of product A less of product A QUESTION 5 The allocated budget is $20 to buy either apples or oranges. Apples are $2 each and oranges are $4 each. Which of the following budget combinations is not currently possible to purchase ? 4 apples and 4 oranges 2 apples and 4 oranges 1 apple and 2 oranges 0 apples and 5 oranges. QUESTION 6 A Consumer is currently paying $12 to buy a product and was willing to pay $18 for that unit. Calculate the consumer surplus for this consumer. Consumer surplus is __________________. $6 $0 $12 $18

Answer 1

1. The total measure of satisfaction from consuming a specified number of goods is called utility

Therefore correct answer is option: Utility

Where utility is total satisfaction that a consumer received from consuming a good or service.

2. The amount of satisfaction from the last unit consumed marginal utility

Therefore correct answer is option: Marginal utility

Marginal utility is the additional satisfaction that a consumer gets from consuming one more unit of a good or service.

3. As more and more of a product in consumed marginal utility decreases

Therefore correct answer is option: marginal utility decreases

Marginal utility is highest for first unit consumed but as more and more of a product in consumed marginal utility decreases.

4. If the marginal utility per dollar is currently higher for product A than product B, then we could predict that more of product A would be consumed.

Therefore correct answer is option: more of product A

A rational consumer will prefer to consume the product with higher marginal utility therefore we could predict that more of product A would be consumed as the marginal utility per dollar is currently higher for product A than product B.

5. The allocated budget is $20 to buy either apples or oranges. Apples are $2 each and oranges are $4 each. Which of the following budget combinations is not currently possible to purchase ?

Budget combinations 4 apples and 4 oranges is not currently possible to purchase because total budget for this purchase is 4 * $2 + 4 *$4 = $8 +$16 = $24 but allocated budget is only $20

Therefore correct answer is option: 4 apples and 4 oranges

6. A Consumer is currently paying $12 to buy a product and was willing to pay $18 for that unit. Calculate the consumer surplus for this consumer.

Consumer surplus = willing to pay – actual pay = $18 - $12 = $6

Consumer surplus is $6

Therefore correct answer is option: $6