CLEP Microeconomics chapter practice4 questions

13 Utility and Consumer Choice

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

Total utility from three slices of pizza is 24 utils and from four slices is 29 utils. Marginal utility of the fourth slice is

Marginal utility is the change in total utility: 29-24=5 utils.
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B. 5 utils

Marginal utility is the change in total utility: 29-24=5 utils.

Question 2

Question 2 of 4

A consumer has 20 to spend on goods X and Y. Their prices are 4 and $5. Which bundle lies on the budget line?

Five units of X cost exactly 5(4)=20. Each other bundle costs more than the available income.
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A. 5 units of X and 0 units of Y

Five units of X cost exactly 5(4)=20. Each other bundle costs more than the available income.

Question 3

Question 3 of 4

A consumer's marginal utility per dollar is 9 for good X and 6 for good Y. To increase total utility, the consumer should initially

The last dollar spent on X adds more utility, so shifting spending from Y toward X raises total utility until the ratios equalize.
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D. buy more X and less Y

The last dollar spent on X adds more utility, so shifting spending from Y toward X raises total utility until the ratios equalize.

Question 4

Question 4 of 4

Diminishing marginal utility means that

Marginal utility commonly declines even while total utility continues to rise. It is the addition, not necessarily the total, that becomes smaller.
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B. each added unit tends to provide less additional utility

Marginal utility commonly declines even while total utility continues to rise. It is the addition, not necessarily the total, that becomes smaller.

Quiz complete