ECO 365T Wk 4 - Apply Quiz (2021 New)

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ECO 365T Wk 4 – Apply Quiz (2021 New)

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›ECO 365–4

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ECO 365T Wk 4 – Apply Quiz (2021 New)

A child is given $2.50 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 10 cents and hard candies 50 cents each. The marginal utilities derived from each product are as shown in the following table.

Number of Items MU of Chocolates MU of Hard Candies

1 60 150

2 50 140

3 40 120

4 30 100

5 20 80

6 10 70

7 5 50

8 0 20

Which combination would give the child the maximum utility out of spending $2.50?

Multiple Choice

7 chocolates and 3 hard candies

8 chocolates and 2 hard candies

5 chocolates and 4 hard candies

4 chocolates and 4 hard candies

Suppose Faith and Mickey are playing both dictator and ultimatum games. Faith is the dictator/proposer and has $80 to allocate. Based on repeated experiments of the dictator and ultimatum games, what payouts to Faith would be most consistent with the findings of behavioral economists?

Multiple Choice

Faith receives $80 from the dictator game and $60 from the ultimatum game.

Faith receives $40 from the dictator game and $34 from the ultimatum game.

Faith receives $40 from the dictator game and $40 from the ultimatum game.

Faith receives $47 from the dictator game and $41 from the ultimatum game.

Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $2 and $4, respectively. The marginal utility of the last units of A and B are 16 and 24, respectively. These data suggest that Ms. Thomson

Multiple Choice

has preferences that are at odds with the principle of diminishing marginal utility.

considers A and B to be complementary goods.

should buy less A and more B.

should buy less B and more A.

If the marginal utility from consuming the fourth unit of a product is 20 and the total utility from all four units is 126, then the total utility from consuming three units must be

Multiple Choice

146.

106.

504.

Suppose Ryan and Rita were randomly shown the numbers 49 and 47, respectively, and then asked to estimate the price of an item about which they have relatively limited knowledge. According to findings from behavioral economics, we would expect

Multiple Choice

Ryan to estimate a price higher than what Rita would estimate.

Ryan to estimate a price about the same as what Rita would estimate.

Ryan to estimate a price lower than what Rita would estimate.

the randomly shown numbers to have no influence on their estimates.

Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4, respectively, and that the consumer’s income is $25

Units of L Total Utility Units of M Total Utility

1 9 1 16

2 15 2 28

3 18 3 36

4 20 4 40

5 21 5 42

How many units of the two products will the rational consumer purchase?

Multiple Choice

5 of L and 2 of M

1 of L and 5 of M

4 of L and 3 of M

3 of L and 4 of M

Mrs. Arnold is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are $0.6 per bottle and $0.4 per bag, respectively. It can be concluded that

Multiple Choice

the two commodities are substitute goods.

Mrs. Arnold should spend more on pretzels and less on soda.

Mrs. Arnold should spend more on soda and less on pretzels.

Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts.

The first Pepsi yields Craig 12 units of utility and the second yields him an additional 15 units of utility. His total utility from three cans of Pepsi is 36 units of utility. The marginal utility of the third Pepsi is

Multiple Choice

21 units of utility.

27 units of utility.

9 units of utility.

36 units of utility.

According to behavioral economics research, in which of the following cases would we expect a person to experience no net change in their utility?

Multiple Choice

When the person gains $100 and loses $100.

When the person gains $250 and loses $100.

When the person gains $100 and loses $250.

When the person gains $100 while everyone else gains $200.

Parker’s shares of stock in ACME Corporation lost $10 in value, but his shares in XYZ, Inc. gained $18. According to behavioral economics research, how would Parker feel as a result of these changes?

Multiple Choice

Parker would feel better off.

Parker would feel worse off.

Parker would feel about the same.

Behavioral economics research suggest that the intensity of losses versus gains follows no measurable pattern.

Tony ran a marathon in 4 hours; his performance last year on the same course was 4.5 hours. Stacey ran the same marathon in 4 hours; her previous time was 4.4 hours. According to behavioral economists, and based solely on the information given, we would expect

Multiple Choice

Tony to feel bad about his performance, and Stacey to feel good about hers.

Tony to feel good about his performance, and Stacey to feel good about hers.

Tony to feel bad about his performance, and Stacey to feel bad about hers.

Tony to feel good about his performance, and Stacey to feel bad about hers.

Suppose a consumer has an income of $24, the price of A is $3, and the price of B is $1. Which of the following combinations is on the consumer’s budget line?

Multiple Choice

4A and 10B

2A and 18B

8A and 24B

5A and 7B

Suppose Justine and Sarah are playing the ultimatum game. Justine is the proposer, has $250 to allocate, and Sarah can accept or reject the offer. Based on repeated experiments of the ultimatum game, what combination of payouts to Justine and Sarah is most likely to occur?

Multiple Choice

$250 for Justine and $0 for Sarah

$125 for Justine and $125 for Sarah

$150 for Justine and $100 for Sarah

$0 for Justine and $250 for Sarah

Number of Units of Commodity Total Utility

3 36

4 80

5 150

6 252

7 350

8 440

Refer to the table. What is the marginal utility of the eighth unit?

Multiple Choice

Suppose Faith and Mickey are playing both dictator and ultimatum games. Faith is the dictator/proposer and has $20 to allocate. Based on repeated experiments of the dictator and ultimatum games, what payouts to Mickey would be most consistent with the findings of behavioral economists?

Multiple Choice

Mickey receives $0 from the dictator game and $2 from the ultimatum game.

Mickey receives $10 from the dictator game and $8 from the ultimatum game.

Mickey receives $10 from the dictator game and $10 from the ultimatum game.

Mickey receives $8 from the dictator game and $10 from the ultimatum game.

Assume that a consumer purchases a combination of products Y and Z and that the MUy/Py = 8 and MUz/Pz = 5. To maximize utility, without spending more money, the consumer should

Multiple Choice

purchase less of Y and more of Z.

purchase more of Y and less of Z.

purchase more of both Y and Z.

make no change in the quantities Y and Z.

The table shows an indifference schedule for several combinations of X and Y.

Combination Quantity of X Quantity of Y

a 20 1

b 16 2

c 12 3

d 10 4

e 9 5

Approximately how much of Y is the consumer willing to give up to obtain the twelfth unit of X?

Multiple Choice

A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 50 cents each. The marginal utilities derived from each product are as shown in the following table.

Number of Items MU of Chocolates MU of Hard Candies

1 60 150

2 50 140

3 40 120

4 30 100

5 20 80

6 10 70

7 5 50

8 0 20

If the child buys either chocolates or hard candies one piece at a time, what will be his first two purchases?

Multiple Choice

a hard candy, followed by another hard candy

a hard candy, followed by a chocolate

a chocolate, followed by a hard candy

a chocolate, followed by another chocolate

Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 8 and MUb/Pb = 6. Ben should purchase

Multiple Choice

less of A and more of B.

less of B and more of A.

more of both A and B.

less of both A and B.

The income of a consumer is $40, the price of A is $4, and the price of B is $6. If the quantity of A is measured vertically, then the slope of the budget line is

Multiple Choice

−1.5.

−0.5.

−0.67.

−2.5.

If a consumer has an income of $24, the price of X is $2, and the price of Y is $3, what is the maximum quantity of X the consumer is able to purchase?

Multiple Choice

The table shows an indifference schedule for several combinations of X and Y.

Combination Quantity of X Quantity of Y

a 20 1

b 16 2

c 12 3

d 10 4

e 9 5

How much of X is the consumer willing to give up to obtain the second unit of Y?

Multiple Choice

A child is given $4.00 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table.

Number of Items MU of Chocolates MU of Hard Candies

1 60 150

2 50 140

3 40 120

4 30 100

5 20 80

6 10 70

7 5 50

8 0 20

Which combination would give the child the maximum utility out of spending $4.00?

Multiple Choice

6 chocolates and 2 hard candies

4 chocolates and 3 hard candies

2 chocolates and 4 hard candies

0 chocolates and 5 hard candies

Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which of the following combinations is on the consumer’s budget line?

Multiple Choice

4A and 9B

5A and 6B

6A and 6B

3A and 8B

Rosa received a corgi pillow as a raffle prize; she would have been willing to pay $20 to buy it herself. Based on the endowment effect, we would expect Rosa to be willing to sell the pillow

Multiple Choice

for some amount less than $20.

only if she is offered more than $20.

for the $20 she would have been willing to pay for the pillow.

under no circumstances whatsoever.

The table shows an indifference schedule for several combinations of X and Y.

Combination Quantity of X Quantity of Y

a 20 1

b 16 2

c 12 3

d 10 4

e 9 5

In moving from combination a to b, the consumer

Multiple Choice

gets 8 units of X for 2 units of Y.

gets 1 unit of X for 4 units of Y.

gives up 4 units of X for 2 units of Y.

gives up 4 units of X for 1 unit of Y.

Assume that a consumer purchases a combination of products Y and Z and that the MUy/Py = 30/2 and MUz/Pz = 45/3. To maximize utility, without spending more money, the consumer should

Multiple Choice

purchase less of Y and more of Z.

purchase more of Y and less of Z.

purchase more of both Y and Z.

make no change in the quantities Y and Z.

The table shows an indifference schedule for several combinations of X and Y.

Combination Quantity of X Quantity of Y

a 20 1

b 16 2

c 12 3

d 10 4

e 9 5

Approximately how much of Y is the consumer willing to give up to obtain the twentieth unit of X?

Multiple Choice

If you purchase a gift worth $12 for your sister, but your sister would be willing to pay only $8 if she bought the item for herself, then the

Multiple Choice

total utility of the gift is $20.

total utility of the gift is $4.

marginal utility of the gift is $4.

loss of value in the gift is $4.

A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 20 cents and hard candies 95 cents each. The marginal utilities derived from each product are as shown in the following table.

Number of Items MU of Chocolates MU of Hard Candies

1 60 150

2 50 140

3 40 120

4 30 100

5 20 80

6 10 70

7 5 50

8 0 20

If the child buys either chocolates or hard candies one piece at a time, what will be his first two purchases?

Multiple Choice

a hard candy, followed by another chocolate

a hard candy, followed by a hard candy

a chocolate, followed by a hard candy

a chocolate, followed by another chocolate

Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $6 and $2, respectively, and that the consumer’s income is $22

Units of L Total Utility Units of M Total Utility

1 9 1 16

2 15 2 28

3 18 3 36

4 20 4 40

5 21 5 42

What level of total utility does the rational consumer realize in equilibrium?

Multiple Choice

186 utils

49 utils

57 utils

63 utils

Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products J and K.

Units of J MUj Units of K MUk

1 56 1 32

2 48 2 28

3 32 3 24

4 24 4 20

5 20 5 12

6 16 6 10

7 12 7 8

What level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $36 and the prices of J and K are $4 and $4, respectively?

Multiple Choice

238 utils

280 utils

284 utils

40 utils

Tony ran a marathon in 4.5 hours; his performance last year on the same course was 4 hours. Stacey ran the same marathon in 4 hours; her previous time was 4.4 hours. According to behavioral economists, and based solely on the information given, we would expect

Multiple Choice

Tony to feel good about his performance, and Stacey to feel good about hers.

Tony to feel bad about his performance, and Stacey to feel good about hers.

Tony to feel bad about his performance, and Stacey to feel bad about hers.

Tony to feel good about his performance, and Stacey to feel bad about hers.

Multiple Choice

21 units of utility.

27 units of utility.

9 units of utility.

36 units of utility.

A consumer is in equilibrium and is spending income in such a way that the marginal utility of product X is 40 units and that of Y is 16 units. If the unit price of X is $5, then the price of Y must be

Multiple Choice

$1 per unit.

$2 per unit.

$3 per unit.

$4 per unit.

The table shows the utility schedule for a consumer of candy bars.

Number Consumed Total Utility

0 0

1 5

2 11

3 18

4 24

5 30

6 35

7 32

Based on the data in the table, you can conclude that the

Multiple Choice

marginal utility of the sixth unit is 210.

marginal utility of the third unit is 18.

total utility of 2 units is 16.

total utility of 5 units is 30.

Assume that a consumer purchases a combination of product A and product B such that the MUa/Pa = 4 and MUb/Pb = 6. To maximize utility without spending more money, the consumer should

Multiple Choice

purchase more of product A and less of product B.In

purchase less of product A and more of product B.

purchase more of both product A and product B.

make no change in purchases of products A and B.

If the marginal utility from consuming the ninth unit of a product is 3 and the total utility from all nine units is 115, then the total utility from consuming eight units must be

Multiple Choice

118.In

112.

1,035.

Multiple Choice

the two commodities are substitute goods.

Mrs. Arnold should spend more on pretzels and less on soda.

Mrs. Arnold should spend more on soda and less on pretzels.

Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts.

Suppose Justine and Sarah are playing the dictator game. Justine is the dictator and has $100 to allocate. Based on repeated experiments of the dictator game, what is the least likely outcome for this game?

Multiple Choice

$100 for Justine and $0 for Sarah.In

$58 for Justine and $42 for Sarah.

$50 for Justine and $50 for Sarah.

$0 for Justine and $100 for Sarah.