Which of the following best expresses the law of diminishing marginal utility?

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Utility as defined in this chapter refers to the A) usefulness of a purchased product B) value of the money a consumer spends on a good C) satisfaction or pleasure from consuming a good D) extra income a consumer gets from buying a good at a lower price 2
Which best expresses the law of diminishing marginal utility? A) The more a person consumes of a product, the smaller becomes the utility that he receives from its consumption. B) The more a person consumes of a product, the smaller becomes the additional utility that she receives as a result of consuming an additional unit of the product. C) The less a person consumes of a product, the smaller becomes the utility that she receives from its consumption. D) The less a person consumes of a product, the smaller becomes the additional utility that he receives as a result of consuming an additional unit of the product. 3
Summing the marginal utilities of each unit consumed will determine total A) cost B) revenue C) utility D) consumption 4
The following table shows a hypothetical total utility schedule for a consumer of chocolate candy bars. Use the table to answer question.

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This consumer begins to experience diminishing marginal utility when he consumes the A) first candy bar B) second candy bar C) third candy bar D) fourth candy bar 5
The following table shows a hypothetical total utility schedule for a consumer of chocolate candy bars. Use the table to answer question.

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Marginal utility becomes negative with the consumption of the A) fourth candy bar B) fifth candy bar C) sixth candy bar D) seventh candy bar 6
The following table shows a hypothetical total utility schedule for a consumer of chocolate candy bars. Use the table to answer question.

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Based on the data, you can conclude that the A) marginal utility of the fourth unit is 6 B) marginal utility of the second unit is 27 C) total utility of 5 units is 42 D) total utility of 3 units is 55 7
After eating eight chocolate chip cookies, you are offered a ninth cookie. You turn down the cookie. Your refusal indicates that the A) marginal utility for chocolate chip cookies is negative B) total utility for chocolate chip cookies is negative C) marginal utility is positive for the eighth and negative for the ninth cookie D) total utility was zero because you ate one cookie and refused the other 8
Which is a dimension or assumption of the marginal-utility theory of consumer behavior? A) The consumer has a small income. B) The consumer is rational. C) Goods and services are free. D) Goods and services yield continually increasing amounts of marginal utility as the consumer buys more of them. 9
A consumer is making purchases of products A and B such that the marginal utility of product A is 20 and the marginal utility of product B is 30. The price of product A is $10 and the price of product B is $20. The utility-maximizing rule suggests that this consumer should A) increase consumption of product B and decrease consumption of product A B) increase consumption of product B and increase consumption of product A C) increase consumption of product A and decrease consumption of product B D) make no change in consumption of A or B 10
Suppose that the prices of A and B are $3 and $2, respectively, that the consumer is spending her entire income and buying 4 units of A and 6 units of B, and that the marginal utility of both the fourth unit of A and the sixth unit of B is 6. It can be concluded that the consumer should buy A) more of both A and B B) more of A and less of B C) less of A and more of B D) less of both A and B 11
Robert Woods is maximizing his satisfaction consuming two goods, X and Y. If the marginal utility of X is half that of Y, what is the price of X if the price of Y is $1.00? A) $0.50 B) $1.00 C) $1.50 D) $2.00 12
Answer question based on the following table showing the marginal-utility schedules for goods X and Y for a hypothetical consumer. The price of good X is $1 and the price of good Y is $2. The income of the consumer is $9.

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To maximize utility, the consumer will buy A) 7 X and 1 Y B) 5 X and 2 Y C) 3 X and 3 Y D) 1 X and 4 Y 13
Answer question based on the following table showing the marginal-utility schedules for goods X and Y for a hypothetical consumer. The price of good X is $1 and the price of good Y is $2. The income of the consumer is $9.

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When the consumer purchases the utility-maximizing combination of goods X and Y, total utility will be A) 36 B) 45 C) 48 D) 52 14
Answer question based on the following table showing the marginal-utility schedules for goods X and Y for a hypothetical consumer. The price of good X is $1 and the price of good Y is $2. The income of the consumer is $9.

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Suppose that the consumer's income increased from $9 to $12. What would be the utility-maximizing combination of goods X and Y? A) 5 X and 2 Y B) 6 X and 3 Y C) 2 X and 5 Y D) 4 X and 4 Y 15
A decrease in the price of product Z will A) increase the marginal utility per dollar spent on Z B) decrease the marginal utility per dollar spent on Z C) decrease the total utility per dollar spent on Z D) cause no change in the marginal utility per dollar spent on Z 16
Answer question on the basis of the following total utility data for products A and B. Assume that the prices of A and B are $6 and $8, respectively, and that consumer income is $36.

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What is the level of total utility for the consumer in equilibrium? A) 86 B) 102 C) 108 D) 120 17
Answer question on the basis of the following total utility data for products A and B. Assume that the prices of A and B are $6 and $8, respectively, and that consumer income is $36.

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How many units of the two products will the consumer buy? A) 1 of A and 4 of B B) 2 of A and 2 of B C) 2 of A and 3 of B D) 3 of A and 4 of B 18
Answer question on the basis of the following total utility data for products A and B. Assume that the prices of A and B are $6 and $8, respectively, and that consumer income is $36.

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If the price of A decreases to $4, then the utility-maximizing combination of the two products is A) 2 of A and 2 of B B) 2 of A and 3 of B C) 3 of A and 3 of B D) 4 of A and 4 of B 19
Answer Questions on the basis of the following total utility data for products A and B. Assume that the prices of A and B are $6 and $8, respectively, and that consumer income is $36.

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Which of the following represents the demand curve for A?

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A) (a) B) (b) C) (c) D) (d) 20
Kristin Hansen buys only two goods, food and clothing. Both are normal goods for Kristin. Suppose the price of food decreases. Kristin's consumption of clothing will A) decrease due to the income effect B) increase due to the income effect C) increase due to the substitution effect D) not change due to the substitution effect 21
The reason the substitution effect works to encourage a consumer to buy more of a product when its price decreases is because A) the real income of the consumer has been increased B) the real income of the consumer has been decreased C) the product is now relatively less expensive than it was D) other products are now relatively less expensive than they were 22
The price of water is substantially less than the price of diamonds because A) the marginal utility of a diamond is significantly less than the marginal utility of a gallon of water B) the marginal utility of a diamond is significantly greater than the marginal utility of a gallon of water C) the total utility of diamonds is greater than the total utility of water D) diamonds have a low marginal utility 23
A consumer has two basic choices: rent a movie for $4.00 and spend 2 hours of time watching it or spend $15 for dinner at a restaurant that takes 1 hour of time. If the marginal utilities of the movie and the dinner are the same, and the consumer values time at $15 an hour, the rational consumer will most likely A) rent more movies and buy fewer restaurant dinners B) buy more restaurant dinners and rent fewer movies C) buy fewer restaurant dinners and rent fewer movies D) make no change in the consumption of both 24
Compared to cash gifts, noncash gifts are preferred A) more because they decrease total utility B) more because they increase total utility C) less because they increase total utility D) less because they decrease total utility 25
According to prospect theory, for gains or losses near the status quo A) gains and losses are experienced more intensely B) gains and losses are experienced less intensely C) losses are experienced more intensely while gains are experienced less intensely D) losses are experienced less intensely while gains are experienced more intensely

Which of the following best expresses the law of diminishing marginal utility *?

Which of the following best defines diminishing marginal utility?

What is law of diminishing marginal utility?

Which of the following illustrates the law of diminishing marginal utility?