ECO 2023
Economics MCQs Assignment
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1. Assume that a consumer purchases a
combination of products X and Y and MUx / Px =
75 utils per dollar and MUy / Py = 50 utils per
dollar. To maximize utility without spending more dollars, the consumer should
buy:
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a.more
of Y and less of X.
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b.more
of X and less of Y.
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d.less
of Y only if the price of Y increases.
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2. The different combinations of any
two goods that an individual can afford to purchase, given his income and
prices, is shown by:
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3. The table given below reports the
total utility derived by an individual from the consumption of different
units of goods A, B, and C.
Table 7.4
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Quantity
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Total utility from A
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Total utility from B
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Total utility from C
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($1.20 per unit)
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($0.80 per unit)
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($0.40 per unit)
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1
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85
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70
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55
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2
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157
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133
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103
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3
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217
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188
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145
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4
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266
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235
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178
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5
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299
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275
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205
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6
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315
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310
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225
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7
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319
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341
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239
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goods doubles, the consumer would maximize
utility by purchasing _____. Refer to Table 7.4. If the consumer’s income
increases from $10 to $20 but the prices of each of the
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a.3
units of good A, 5 units of good B, and 6 units of good C
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b.3
units of good A, 6 units of good B, and 4 units of good C
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c.6
units of good A, 0 units of good B, and 7 units of good C
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d.2
units of good A, 6 units of good B, and 7 units of good C
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e.7
units of good A, 7 units of good B, and 7 units of good C
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4. The prices that people are willing
to pay for goods and services mostly depend on:
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a.the
marginal utility derived from the goods and services.
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b.the
cost of producing the goods and services.
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c.the
total utility derived from the goods and services.
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d.whether
the goods are legal, since the laws affect the position of both supply and
demand curves.
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e.the
availability of raw materials for producing the goods and services.
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5. Following a decrease in the price
of a good, an individual will purchase more of the now less expensive good and
less of other more expensive goods. This is known as the _____ effect.
6. _____ is the understanding that
perfect information is not likely to be available, and that as a result, people
make decisions that in hindsight look irrational, but in reality are the
rational results of a brain that is economizing.
7. If total utility increases by
smaller and smaller amounts as more units of a product are consumed, then
marginal utility is:
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a.decreasing
and is a negative amount.
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b.decreasing
and is a positive amount.
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d.increasing
and is a positive amount.
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e.increasing
and is a negative amount.
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8. The law of diminishing marginal
utility states that as additional units are consumed, satisfaction per unit
will decline.
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9. The table below shows the total
utility associated with various units of goods X and Y.
Table 7.5
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Quantity
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Total Utility from X
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Total Utility from Y
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1
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24
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85
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2
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42
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130
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3
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56
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160
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4
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66
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185
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5
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74
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200
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6
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80
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210
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7
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84
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215
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Refer to Table 7.5. Given that the price of
good X is $2 per unit, the price of good Y is $5 per unit, and that the
consumer spends a total of $14 on both goods, what is the total utility
associated with the utility-maximizing combination?
10. Diminishing marginal returns means
that as you combine more units of a variable resource with a set of fixed
resources:
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a.the
average physical product of the fixed inputs increases at an increasing
rate.
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b.the
total output decreases.
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c.the
marginal physical product of the variable input decreases.
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d.the
marginal physical product of the variable input increases at a constant
rate.
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e.the
marginal physical product of the variable input increases at a decreasing
rate.
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